Cadwalader attorneys reviewed the European Securities and Markets Authority ("ESMA") final report on the technical standards on disclosure requirements under the Securitization Regulation. The Securitization Regulation will be applicable across the European Union and apply to securitizations, the securities of which are issued on or after the application date of January 1, 2019.

In the memorandum, Cadwalader attorneys highlighted:

  • the legislative basis of the disclosure technical standards;
  • securitizations subject to the disclosure of technical standards;
  • concerns raised in feedback regarding the 2017 December consultation paper;
  • ESMA's draft disclosure technical standards and the templates;
  • reporting for collateralized loan obligations;
  • concerns raised in feedback regarding non-bank/non-original lender originators; and
  • "no data" options in the templates.

The attorneys also reviewed issues regarding the Securitization Regulation's transitional provisions. According to ESMA, compliance with the disclosure technical standards may require substantial time and effort; consequently, ESMA proposed a 15- to 18-month transition period for implementation. Further, as a result of amendments to the Capital Requirements Regulation, the transparency requirements could apply on a "consolidated basis" to a non-EU subsidiary of an EU bank. Such a subsidiary would be required to comply with the EU transparency requirements on top of other local rules.

The disclosure technical standards will now be submitted to the European Union, which will then adopt them by way of a delegated EU regulation. The attorneys noted that ESMA addressed concerns raised by market participants regarding the disclosure technical standards, stating that "[i]t is to be hoped that the Commission will follow ESMA's advice on these points."

The memorandum was authored by Stephen Day, David Quirolo, Nick Shiren, Daniel Tobias, Jeremiah Wagner, Suzanne Bell, Robert Cannon, Assia Damianova, Neil Macleod, Claire Puddicombe and Sabah Nawaz.

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