ESMA updates its Q&As on the Securitisation Regulation
The Malta Financial Sercvices Authority ("MFSA") has recently published a circular addressed to all interested stakeholders, in particular to the securitisation market participants, including firms considering registering with the European Securities Markets Authority ("ESMA") to provide securitisation repository services under the Securitisation Regulation.
This MFSA notifies all interested stakeholder that on the 15th November 2019, ESMA updated its Questions and Answers ("Q&As") on the Securitisation Regulation to include clarifications on the templates contained in the recently published draft technical standards on disclosure.
The new Q&As cover the following areas:
- Securitisation repositories;
- Simple, transparent and standardised (STS) notifications;
- Disclosure requirements and templates;
- Underlying exposures to real estate and corporates;
- Investor reports; and
- Inside information or significant event information.
The purpose of the Q&As are to promote the consistent application of the Securitisation Regulation across member states and guide regulated entities accordingly.
European Commission publishes Securitisation Transparency Regulatory Technical Standards
The MFSA has also published a circular addressing it to all interested stakeholders in particular to the securitisation market participants.The Securitisation Regulation has been applicable since the 1 January 2019 with the aim to strengthen the legislative framework implemented after the financial crisis, in order to restore confidence in the securitisation market as well as promote securitisation as the foundations of well-functioning financial markets.
On the 16th October 2019, the European Commission published the regulatory technical standards ("RTS") in relation to the transparency requirements under the Securitisation Regulation. Information disclosure is fundamental for both investors and potential investors to conduct due diligence and monitor risks, which enables entities to ensure the smooth functioning of securitisation markets.
The RTS are based on the draft regulatory technical standards issued by ESMA and include the following legal elements:
- A distinction between public and private securitisations;
- The granularity of information to be disclosed in terms of long-term and short-term securitisations;
- Standardised identifiers facilitating the tracking of information across the different categories of information disclosed; and
- Tailored reporting requirements for the most prominent underlying exposures.
Once approved, the RTS will be published in the Official Journal of the European Union, and could begin to apply in the first quarter of 2020. Thus, the MFSA urges the market participants to ensure that they have the relevant data available in order to comply with the new reporting requirements once the RTS comes into force.
Feel free to contact us if you require any further information on the Securitisation Regulation.