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ESMA defines standards for the implementation of the Securitisation Regulation

16 July 2018

The European Securities and Markets Authority (ESMA) has issued today a first set of technical standards under the Securitisation Regulation (SR) containing both draft regulatory and implementing standards (RTS/ITS).

Regulation (SR) containing both draft regulatory and implementing standards (RTS/ITS). These TS contain detailed arrangements to implement the new European regulatory framework for securitisations, which is intended to promote simple, transparent and standardised (STS) securitisations.

Notification templates for STS securitisations

ESMA’s draft TS specify the information and format that the originators and sponsors of securitisation products are required to notify to ESMA should a securitisation transaction meet the STS requirements. The STS notification is a necessary step in order to apply for STS preferential capital treatment.

The STS notification standardised templates distinguishes between non-ABCP (Asset Backed Commercial Paper) securitisation, ABCP transaction and ABCP programme. The STS notification needs to include a confirmation, concise explanation or detailed explanation as to why the securitisation transaction satisfies each of the STS criteria. This obligation is proportionate, as some criteria require greater explanation than others. The notification process also includes a cross-referencing system to investment prospectuses, if any, to avoid duplication of disclosure requirements.

Authorisation of third party assessing STS compliance

The draft RTS specifies the information to be provided to the competent authorities in the application for the authorisation of a third party assessing the compliance of securitisations with the STS criteria.

Next Steps

ESMA has submitted today for endorsement its final draft RTS/ITS to the European Commission. These RTS/ITS will contribute to delivering a regulatory rule-book for European securitisation markets.