The European Banking Authority has launched a public consultation on draft Guidelines providing guidance to both originator institutions and competent authorities when assessing significant risk transfer (SRT) for securitisation transactions. These Guidelines will be part of the EU Single Rulebook in the banking sector and will ensure harmonised assessment and treatment of significant risk transfer across all EU Member States.

The proposed Guidelines include (i) requirements for originator institutions when engaging in securitisation transactions for SRT; (ii) requirements for competent authorities to assess transactions that claim SRT; (iii) requirements for competent authorities when assessing whether commensurate credit risk has been transferred to independent third parties.

The public consultation runs until 17 March 2014.