This briefing summarises the key changes that will be made by the new securitisation framework from the date of its application. OJ L 285, 6.11.2019, p. 1–5 (BG, ES, CS, DA, DE, ET, EL, EN, FR, HR, IT, LV, LT, … Information must be disclosed via a registered securitisation repository or, if no registered securitisation repository exists, via a website that meets specified requirements as to data control and security. Therefore, this SI restates the definition of ‘sponsor’ to clarify the geographical scope of the definition and corrects the relevant directive cross-references. The securitisation of residential loans originated since 20 March 2014 that were marketed and underwritten on the premise that the loan applicant or intermediaries were made aware that the information provided by the loan applicant might not be verified by the lender (often referred to as ‘self-certified’ mortgages) is prohibited. The general position is that the Securitisation Regulation will only apply to securitisations the securities of which are issued, or which create new securitisation positions, on or after 1 January 2019. Firstly, it sets out provisions in relation to all securitisations which are within the scope of the regulation… The CRR amendments introduce preferential regulatory capital requirements for exposures to STS securitisations, when compared with exposures to non-STS securitisations, for credit institutions and investment firms. Considering the historical treatment of re-securitisations, this does not come as a surprise and as a result of the abovementioned capital requirements, such transactions are already rare. All eyes are now on the development of supporting technical standards and guidelines, which will flesh out much of the detail required to comply with the new regime. The EU Securitisation Regulation (the “Securitisation Regulation”) has been applicable since 1 January 2019. the British Business Bank). An originator which purchases a third party’s exposures for its own account and then securitises them is required to verify that the original lender also met such credit granting criteria (although there is limited grandfathering for older transactions complying with current rules). Where necessary, provisions covering Gibraltar will be included in future SIs. Where an entity is already supervised by a competent authority under existing EU sectoral legislation, the same competent authority will generally supervise their compliance with the Securitisation Regulation. This is a significant consideration for UK originators as they will be non-EU parties post-Brexit. 12 October 2018 – Consultation Paper (CP18/30) 3. A securitisation can be classified as STS if it meets standards derived from the international Basel framework. The drafting of the CRR amendments has created significant concerns (for institutions who are subject to the CRR) in relation to application of the rules on a consolidated basis to non-EU subsidiaries. These are entities that carry out financial, development and promotional activities with a mandate given to them by a national or regional government. Securitisation is the process of pooling various financial assets to form a financial instrument that can be marketed to investors. The European Union (Withdrawal) Act 2018 (EUWA) repeals the European Communities Act 1972 on the day the UK leaves the EU and converts into UK domestic law the existing body of directly applicable EU law. In the context of private transactions, however, “potential” investors is likely to be a limited category of persons. 1 August 2018 – Consultation Paper (CP18/22) 2. Mayer Brown is a global services provider comprising associated legal practices that are separate entities, including Mayer Brown LLP (Illinois, USA), Mayer Brown International LLP (England), Mayer Brown (a Hong Kong partnership) and Tauil & Chequer Advogados (a Brazilian law partnership) (collectively the “Mayer Brown Practices”) and non-legal service providers, which provide consultancy services (the “Mayer Brown Consultancies”). This direct risk retention obligation applies to any originator, sponsor or original lender, including corporates, not just institutional entities regulated under sectoral legislation. Overview Securitisation played a significant role in the global financial crisis, which created an impetus for reforms that would introduce stricter standards and make securitisations simpler and more transparent. This packaging allows banks to transfer the risks of some loans to other banks or long-term investors such as insurance companies and asset managers. The EUWA also gives Ministers powers to make Statutory Instruments (SIs) to prevent, remedy or mitigate any failure of EU law to operate effectively, or any other deficiency in retained EU law.