The Governing Council of the European Central Bank (the “ECB”) has adopted a new regulation on 19 December 2008 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions (the “FVCs”). The purpose of this Regulation (EC) No 24/2009 (ECB/2008/30) (the “Regulation”) is to provide the ECB with adequate statistics on the financial activities of the FVCs. Indeed, according to Article 2(1) of the Regulation (EC) No 2533/98 the ECB, assisted by the national central banks (the “NCBs”) has the right to collect statistical information within the limits of the reference reporting population in order to fulfil its statistical reporting requirements. It follows from Article 2(2) (a) of Regulation (EC) No 2533/98 that FVCs form part of the reference reporting population.
The statistical information provided in accordance with the Regulation needs to be considered with the data requirements for monetary financial institutions (the “MFIs”) on securitised loans as laid down in Regulation (EC) No 25/2009 of 19 December 2008 concerning the balance sheet of the MFIs sector. The Regulation has been published in the Official Journal of the European Union on 20 January 2009 and came into force on the 20th day following this publication.
The Regulation is directly applicable and thus applies to Luxembourg FVCs.
A separate regulation of the Luxembourg Central Bank might be adopted in order to specify the modalities of application of the Regulation in Luxembourg.
After having determined the reporting population concerned by the Regulation (1), we will sum up the reporting requirements laid down (2), the timing for such reporting (3) and the sanctions for not respecting the Regulation (4).
1) PERSONAL SCOPE OF THE REGULATION
a) Reporting population
The reporting population subject to the obligations laid down in the Regulation is composed of the FVCs resident in the territory of a European Union member state that has adopted euro. According to Article 1 (1) of the Regulation, the FVCs concerned are all undertakings that are formed pursuant to national or Community law under:
- contract law as a common fund managed by management companies,
- trust law,
- company law as a public or private limited company, and
- any other similar mechanism.
In addition, the activity of the FVC must meet both of the following criteria: (i) it intends to carry out, or carries out, one or more securitisation transactions and is insulated from the risk of bankruptcy or any other default of the originator; and (ii) it issues, or intends to issue, securities, securitisation fund units, other debt instruments and/or financial derivatives and/or legally or economically owns, or may own, assets underlying the issue of securities; securitisation fund units, other debt instruments and/or financial derivatives that are offered for sale to the public or sold on the basis of private placements.
The MFIs and the investment funds (within the meaning of Article 1 of Regulation (EC) 958/2007 of the ECB of 27 July 2007) are not included in the definition of FVCs and are thus not covered by the Regulation.
The ECB' s Executive Board shall establish and maintain, for statistical purposes, a list of FVCs that form the reference reporting population. The NCBs and the ECB shall make this list and its updates available in an appropriate form, including by electronic means, via the Internet or, at the request of the reporting agents concerned, in paper form.
In Luxembourg, the Regulation applies to
- securitisation vehicles subject to the Luxembourg Act of 22 March 2004 on securitisation (the ''Securitisation Act''); and
- vehicles established as ordinary commercial companies outside the scope of the
Securitisation Act issuing asset-linked securities/units/debt instruments.
According to Article 5 of the Regulation, the FVCs concerned by the Regulation shall be granted a derogation to the reporting requirements set out in Article 4 by the NCB of their Member State of residence. These exemptions, which can be total or partial, are the following:
2) REPORTING REQUIREMENTS
a) Information to be declared by the actual reporting population
The actual reporting population shall provide to the relevant NCB the following information on a quarterly basis:
- data on end-of-quarter outstanding amounts;
- data on financial transactions; and
- data on write-offs/write-downs on the assets (or with the authorisation of the relevant NCB, other information which allows the NCB to derive the required data on write-offs/write-downs).
The reporting must be done in conformity with Annexes I (Statistical Reporting Requirements), II (Definitions) and III (Minimum standards to be applied by the actual reporting population) of the Regulation (attached as Schedules 1 and 2). Without prejudice to the reporting rules laid down in Annex II of the Regulation, all assets and liabilities of FVCs shall be reported under the Regulation in accordance with the reporting rules laid down in the relevant national law.
When the national law requires the reporting of instruments at their market value, NCBs may exempt the FVCs of such obligation where the costs entailed by the FVC would be unreasonably high. In such case, the FVCs shall apply the valuation used in the investor reports.
b) Information to be declared by a FVC concerned by a derogation
The FVCs that benefit from the exemption laid down in Article 5 (1) (b) must however declare to the relevant NCB on a quarterly basis, end-of-quarter outstanding amount data on total assets.
The FVCs that benefit from a derogation within the meaning of Article 5 (1) (c) shall report their annual financial statements to the relevant NCB if they are not available from public sources. This reporting must be done within six months following the end of the reference period or at the earliest point in time thereafter. The relevant NCB shall withdraw the derogation if the data has not been made available in time to the relevant NCB for three consecutive reporting periods, independent of any fault attributable to the FVC involved.
In case the FVC does not respect its reporting obligations under the Regulation, it shall be subject to the ECB's sanctions regime laid down in Article 7 of the Regulation (EC) No 2533/98. This means that the ECB may impose the following sanctions to a FVC:
- In the event the ECB receives no statistical data from the FVC, the latest is subject to a daily penalty payment not exceeding EUR 10,000, with the total fine not exceeding EUR 100,000;
- If the statistical data received by the ECB from the FVC are incorrect, incomplete or in a form not complying with the requirements of the Regulation, the FVC is subject to a fine not exceeding EUR 200,000; and
- If the FVC obstructs the verification made by the NCB or the ECB on the accuracy and quality of the information transmitted, the FVC is subject to a fine not exceeding EUR 200,000.
The sanctions shall be additional to the obligation on the FVC to meet the costs of the verification.