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Securitisation Update – Recent Amendments and Guidance

AUTHORs: Richard Kelly co-author(s): Vincent McConnon, Alan Bunbury Services: Finance and Capital Markets DATE: 08/04/2021

In recent weeks there have been several updates and amendments at EU level in relation to Regulation (EU) 2017/2402 (the “Securitisation Regulation”) that will be of particular interest to participants in the securitisation market:

1. amendments to the Securitisation Regulation (and Regulation (EU) 575/2013 (the “Capital Requirements Regulation” or “CRR”)) effective from 9 April 2021 (the “Amendments”); and

2. publications from the European Supervisory Authorities (“ESAs”) on 26 March 2021 comprising:

a. an opinion to the European Commission on the jurisdictional scope of application of the Securitisation Regulation (the “Opinion”); and

b. Q&As on cross-sectoral aspects of the Securitisation Regulation (the “Q&As”).

The Amendments, Opinion and Q&As provide much food for thought for market participants and their legal advisors. The industry will welcome the Amendments, which should better allow securitisations to facilitate the recovery and growth of European economies as they enter the unprecedented post-pandemic era.

The Q&As, though short, provide helpful clarity on a number of questions that have been the subject of considerable uncertainty. The Opinion also gives some interesting insight into the likely priorities of regulators as they undertake a general review of the Securitisation Regulation later this year.

However, the Opinion also poses some difficult questions for the industry to grapple with.  In particular, EU institutional investors may be concerned by the suggestion that their ability to invest in third country securitisations could be subject to those third countries having equivalent securitisation transparency regimes.  It remains to be seen whether the proposals set out in the Opinion are implemented in the coming months, either through interpretive guidance from the European Commission or through amendments to the Securitisation Regulation.

Please click here for a more detailed article in which we discuss some key take away points with respect to these updates.