The Malta Financial Services Authority (“MFSA”) has released two circulars on Regulation (EU) No. 2017/2402 (the “Securitisation Regulation”) following the publication by the European Commission of regulatory technical standards (RTS) in relation to transparency requirements under the Securitisation Regulation and the publication by the European Securities and Markets Authority (ESMA) of an updated set of questions and answers related to this aspect of the Securitisation Regulation (“Q&As”).
European Commission publishes final drafts of the RTS
Enhancing transparency on the securitisation market is among the key objectives of the Securitisation Regulation, crucial to restoring confidence in securitisation. Article 7 of the Securitisation Regulation provides that the originator, sponsor and securitisation special purpose entity (SSPE) (that is, the issuer) of a securitisation must make certain prescribed information relating to the securitisation available to investors, competent authorities and, upon request, to potential investors. To this end, Article 7 of the Securitisation Regulation mandated ESMA to produce draft RTS specifying the information and details of a securitisation to be disclosed by the aforementioned securitisation reporting entities.
On 16 October, 2019, the European Commission published final drafts of RTS (the “Draft RTS”) setting out tailored reporting requirements for the most prominent underlying exposure types and detailing the information to be made available. Following adoption by the European Commission, there is now a three-month period within which the European Parliament and the Council of the European Union may object to the Draft RTS. Once approved, the Draft RTS will be published in the Official Journal and expected to come into force within 20 days of their publication.
Should no material objections arise, the Draft RTS would likely come into effect in Q1 2020, following which all securitisations regulated by the Securitisation Regulation will need to adhere to the applicable reporting templates contained in the Draft RTS. For this reason, the MFSA urges market participants to ensure that they have the relevant data available in order to comply with the new reporting requirements once the RTS come into force. The Draft RTS can be accessed here.
ESMA updates its Q&As on the Securitisation Regulation
On 15 November 2019, ESMA published an updated version of its Q&As on the Securitisation Regulation. The Q&A document is intended to promote common, uniform, and consistent supervisory approaches and practices in the day-to-day application of the Securitisation Regulation and to provide high level guidance to securitisation entities in complying with their obligations. The updates to the Q&A document, which can be accessed here, also provide clarifications as to how certain fields in the reporting templates contained in the Draft RTS should be completed.