The European Securities and Markets Authority (ESMA) has published a brief update on the project to require (under Article 8b of the Credit Rating Agencies Regulation as amended, CRA III) issuers, originators and sponsors to submit information on their "structured finance instruments" (SFIs) to ESMA, for publication on an "SFIs website", under provisions that are scheduled to apply from 1 January 2017 (see Edition 15 of this SCM Briefing for the latest background on Article 8b). The SFIs website is important because it is also (potentially) an integral part of the European Commission's proposed Securitisation Regulation which sets a framework for "Simple, Transparent and Standardised" (STS) securitisation, as it requires (under proposed Article 5 of the Securitisation Regulation) issuers to meet certain transparency requirements by publishing detailed information on their transactions "by means of a website which may be password protected" (as we outline above under Key Developments, the latest amendments to the proposed Securitisation Regulation envisage the creation of a similar platform with similar aims and disclosure requirements). ESMA is also required to set out Regulatory Technical Standards under the proposed Securitisation Regulation on various matters including the information required to be provided on this website and its format, and the various requirements to be met by the website on which the information will be made available to investors. ESMA's update noted that, in order to implement Article 8b of CRA III, it was required to issue "technical instructions" by 1 July 2016 with a view to facilitating reporting on the SFIs website from 1 January 2017. However, ESMA reports that it has encountered "several issues" in the set-up of the SFIs website, including a lack of funding for the set-up. As a result, the SFIs website is unlikely to be ready for reporting from 1 January 2017, and ESMA would be unlikely to publish the technical instructions by 1 July 2016 (and they have not been published since that date). Since many involved in the securitisation industry have been pushing for Article 5 of the Securitisation Regulation and Article 8b of CRA III to be aligned in order to rationalise the somewhat duplicative nature of these (and other existing disclosure) requirements, this development may prompt a solution to be developed and agreed as part of the (ongoing) negotiations on the Securitisation Regulation. However, the news from ESMA is somewhat of a setback for the securitisation market, as this key aspect of the transparency requirements for securitisation transactions - and the market's rehabilitation (at least in the eyes of regulators) - will no doubt be delayed.
European Securities and Markets Authority News Release