ESAs’ report on the implementation and functioning of the securitisation regulation
17 May 2021
The Report is meant to provide guidance to the European Commission in the context of its review of the functioning of the SECR. It also provides initial inputs to the ongoing discussion on the efficiency of the securitisation framework given the role that securitisation could play in the recovery post the Covid-19 pandemic.
The Joint Committee of the European Supervisory
Authorities (ESAs – European Banking Authority, European Insurance and
Occupational Pensions Authority, and European Securities and Markets
Authority) published today
its analysis of the implementation and the functioning of the EU
Securitisation Regulation (SECR), including recommendations on how to
address initial inconsistencies and challenges, which may affect the
overall efficiency of the current securitisation regime.
The SECR, which became applicable in January 2019,
has been useful in increasing the overall soundness of the EU
securitisation market and in reducing the stigma of securitisation
products. However, some adjustments could be considered to further
improve the overall consistency of the existing framework. In
particular, the Report highlights:
- Transparency requirements: given the trend in
increasing issuances of private securitisations and considering the SECR
objectives of access of information and investor protection, a more
precise legal definition for private securitisations should be specified
in the SECR in order to clearly identify private securitisations that
should comply with the transparency requirements. Data reported for
those private securitisations should also be made available by means of a
securitisation repository in order to ensure high quality data and
facilitate the supervision of the compliance with the transparency
requirements.
- Due diligence requirements: regulatory guidance
would be useful to specify how proportionality could be implemented in
the area of due-diligence to facilitate entrance of new investors in the
EU securitisation market.
- Criteria for simple, transparent and standardised (STS) securitisation:
targeted amendments in the STS criteria would be needed to facilitate
the use of the STS label for ABCP programmes. In addition, in the medium
term, as more STS issuances are executed and the STS market reaches a
stable pace, further analysis should be performed by the European
Commission with ESAs’ support to determine how the STS criteria could be
simplified without reducing the quality of the standard.
- Supervision of securitisation requirements: in
order to further enhance the supervision of securitisation requirements,
it is deemed necessary to explore i) how to develop common EU
supervisory tools, ii) potential alternatives to the current STS
supervisory framework, in particular for those jurisdictions with
limited STS securitisation issuances and, iii) the relevance of a common
EU approach to the ongoing supervision of authorisation conditions for
third-party verifiers (TPVs).
Legal Basis
This Report has been developed in accordance with Article 44 of the
SECR (Reg. EU 2017/2402) which requires that the JC of ESAs delivers a
first report on the implementation and the functioning of the SECR by
January 2021. In accordance with the mandate, the analysis focuses on
the implementation of the general requirements applicable to all
securitisations, including the risk retention, due-diligence and
transparency requirements as well as on the specific requirements
related to STS securitisations. The Report also includes further
analysis to cover material risks and new vulnerabilities that may have
materialised.
ESMA
© ESMA
