On July 16, 2018, ESMA published final draft technical standards under the Securitization Regulation (also known as the STS Regulation). Among other things, the Securitization Regulation, which will apply directly across the EU from January 1, 2019, provides the criteria for identifying which securitizations will be designated as "simple, transparent and standardised" (STS) securitizations. The Securitization Regulation requires originators and sponsors to notify ESMA when a securitization meets the STS criteria and ESMA will maintain a list of all such securitizations on its website. The Securitization Regulation allows (but does not require) originators, sponsors and securitization special purpose entities to use third-party firms to assess whether a securitization meets the STS criteria, provided that those firms are authorized by the relevant national regulator.
ESMA is mandated under the Securitization Regulation to develop RTS and ITS on these elements. ESMA consulted on proposed draft Technical Standards in December 2017.
ESMA has published the following final standards:
- final draft RTS specifying the information that the originator, sponsor and special purpose vehicle are required to provide to ESMA to comply with the STS notification obligations;
- final draft RTS specifying the applicable requirements for third party entities seeking authorization as providers of STS verification services; and
- final draft ITS setting out the templates that must be used for notification of STS status. Separate templates are provided for asset-backed commercial paper (ABCP) securitizations, ABCP programmes and non-ABCP transactions.
ESMA has submitted the draft RTS and ITS to the European Commission for endorsement. The final RTS and ITS will apply from January 1, 2019.
The final draft standards are available at: https://www.esma.europa.eu/press-news/esma-news/esma-defines-standards-implementation-securitisation-regulation.
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