The tale of the Securitisation Regulation

The Regulation aims to strengthen the legislative framework for European securitization market. It is a building block of the Capital Markets Union (CMU) which contributes to the Commission’s priority objective of supporting job creation and sustainable growth.

The Securitisation Regulation (SR) formed a part of Investment Plan for Europe, also known as the Juncker Plan, named after Jean-Claude Juncker, the president of European Commission at that time. The plan was officially communicated by the Commission on November 26, 2014 and the SR intended to restart high-quality securitization markets without repeating mistakes made before the 2008 financial crisis.

The first draft of the SR together with STS criteria was published by European Commission (EC) on September 30, 2015. The paper was updated in July 2016 and final version published in June 2017. The Regulation was published in Official Journal of the EU on December 28, 2017 and entered into force 20 days later. Even though the SR is legally binding since January 2018, its text start to apply only from January 1, 2019.

The SR delegates a significant work to European Securities and Markets Authority (ESMA), European Banking Authority (EBA) and European Insurance and Occupational Pensions Authority (EIOPA) in a form of development of regulatory technical standards (RTS). Despite of given timeline, some RTS are delayed. The most awaited ones are related to new disclosure and reporting templates (Article 7) and registration of securitization repository (Articles 10-17). Adoption of these Articles will not only ensure more standardized and transparent data for the investors, but it will also trigger a convergence of ECB’s eligibility criteria (see here). As of today, both above mentioned RTS are published as final draft, awaiting review from EC’s side. While it is difficult to predict the amount of time EC will need, the remaining part of the legislative process is quite clear. Once endorsed by EC, the Parliament has one to six months to adopt them with additional 20 days of publishment period in the Official Journal until they become binding.

 

For a better understanding, we put together following Timeline

 

 

Petr Surala, CFA – Mail: petr.surala@pwc.com Dr. Philipp Völk – Mail: philipp.voelk@pwc.com

 

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