Further to publications on 'qualifying securitisations' by, amongst others, the European Central Bank (the "ECB") and on 'high quality liquid assets' with a view to, inter alia, the Liquidity Coverage Ratio (LCR) by, amongst others, the European Banking Authority ("EBA") several new documents and papers have been published setting forth guidelines, criteria and recommendations for securitisation transactions.
The most recent papers include the discussion paper by the EBA on simple, standard and transparent securitisations, dated 14 October 2014 (the "Discussion Paper"), which is published further to a request by the ECB, and the consultative document by the Basel Committee on Banking Supervision ("BCBS") and the International Organization of Securities Commissions ("IOSCO") including criteria for identifying simple, transparent and comparable securitisations, dated 11 December 2014 (the "Consultative Document"). The Discussion Paper and the Consultative Document highlight, inter alia, the need to align the information relating to the underlying assets available to the originator/issuer and the investor prior to closing and the importance of homogenous underwriting criteria and recommend simple waterfall structures. Furthermore, in the Discussion Paper the EBA states that there should be a distinction between qualifying securitisations and other securitisations and proposes - for qualifying securitisations - a capital charge on the most senior tranche which more closely mimics the capital charge for covered bonds.
The EBA invited market participants to provide their input and views on the discussion paper by mid-January 2015 and expects to submit its final technical advice to the European Commission in the second quarter of 2015. The BCBS and IOSCO also welcome comments on their Consultative Documents. The deadline is set at 13 February 2015.
Click here for the report by the BCBS 'Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools', dated January 2013.
Click here for the report by the EBA 'Report on appropriate uniform definitions of extremely HQLA and HQLA', dated December 2013.
Click here for the report by the ECB 'The case for a better functioning securitisation market in the European Union', dated May 2014.
Click here for the discussion paper by EBA on 'Simple, standard and transparent securitisations', dated 14 October 2014.
Click here for the consultative document by BCBS and IOSCO including 'Criteria for identifying simple, transparent and comparable securitisations', dated 11 December 2014