European Commission consults on EU securitisation framework

The European Commission has launched a consultation on the EU securitisation framework. The consultation covers the following issues:

• the effects of the EU Securitisation Regulation;
• private securitisations;
• due diligence;
• jurisdictional scope;
• equivalence in respect of simple, transparent and standardised (STS) securitisations;
• disclosure of information on environmental performance and sustainability;
• the need for establishing a system of limited-licensed banks to perform the functions of securitisation special purpose entities;
• supervision;
• assessment of non-neutrality correction factors impact;
• maturity;
• treatment of STS securitisations and asset-backed commercial papers for the liquidity coverage ratio;
• significant risk transfer (SRT) tests;
• the SRT assessment process;
• amendments to the Capital Requirements Regulation; and
• Solvency II.

The consultation will close on 17 September 2021.

This closely follows the launching, by HM Treasury, of a consultation which covers some of these issues in respect of the UK Securitisation Regulation (such as the effects of the securitisation regime; private securitisations; STS equivalence; environmental, social and governance disclosures; and the use of limited-licensed banks). Separately, the European Banking Authority has recently commenced a consultation on risk retention.

Please speak to your usual Macfarlanes contact if you have any questions.