Common rules and new framework for securitisation [EU Legislation in Progress]

In autumn 2015, the European Commission proposed, in the context of the Capital Markets Union initiative, a regulation on securitisation. The proposal followed a consultation with stakeholders and took into account initiatives at global (IOSCO) and European levels (EBA). The Commission’s aim is to restore investor confidence in securitisation transactions and contribute to reviving the real economy through increased financing and targeted risk allocation. The proposal replaces existing rules relating to due diligence, risk retention, transparency and supervision with a uniform regime. It provides a framework to identify simple, transparent and standardised (STS) securitisations and to allow investors to analyse associated risks.

The proposal came as a package with a second proposal, to amend the Capital Requirements Regulation applicable to credit institutions and investment firms in respect of securitisation (see related url hyperlink to this Briefing). In November 2015, the Council agreed its approach on both proposals.

This Briefing updates a previous one of February 2016.

Written by Angelos Delivorias (2nd edition).

ESO: Background information: Proposal for a Regulation of the European Parliament and of the Council laying down common rules on securitisation and creating a European framework for simple, transparent and standardised securitisation and amending Directives 2009/65/EC, 2009/138/EC, 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 http://www.europeansources.info/record/proposal-for-a-regulation-of-the-european-parliament-and-of-the-council-laying-down-common-rules-on-securitisation-and-creating-a-european-framework-for-simple-transparent-and-standardised-securitisa/

EP: EPRS: Briefing: EU Legislation in Progress: Securitisation and capital requirements, July 2016 http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586625/EPRS_BRI(2016)586625_EN.pdf

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