HB Ad Slot
HB Mobile Ad Slot
ESAs Opinion on Jurisdictional Scope of the Securitisation Regulation
Friday, April 2, 2021

On March 26, the European Supervisory Authorities (ESAs) published an opinion to the European Commission on the jurisdictional scope of the Securitisation Regulation ((EU) 2017/2402).

In the Securitisation Regulation, the definition of “securitization” does not set out its jurisdictional scope and does not stop entities located in a third country (for example, the UK) from being party to a securitization. Securitizations with a third-country party can lead to difficulties when interpreting Articles 5 to 7 and 9 of the Securitisation Regulation and obstruct the effective functioning of the market. The following scenarios are specifically highlighted:

  • securitizations where some of the sell-side parties are located in a third country;

  • securitizations where all sell-side parties are located in a third country and EU investors invest in them;

  • investments in securitizations by subsidiaries of EU regulated groups, where those subsidiaries are located in a third country; and

  • securitizations where one of the parties is a third-country investment fund manager.

Hence, the ESAs’ view is the Commission should publish a statement to provide interpretative guidance on application points.

The opinion suggests:

  • the Commission should use the future review of the securitization framework to propose amendments to the Securitisation Regulation;

  • amending Article 14 of the Capital Requirements Regulation (575/2013) (CRR) to enable an EU parent undertaking to ring-fence a third-country subsidiary investing in a securitization from the EU group;

  • amendments to Article 42 of the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) to clarify how rules apply to non-EU AIFMs; and

  • amendments to drafting in the Securitisation Regulation to avoid conflicts with delegation regimes in the AIFMD and UCITS Directive (2009/65/EC).

ESA Opinion

HTML Embed Code
HB Ad Slot
HB Ad Slot
HB Mobile Ad Slot
HB Ad Slot
HB Mobile Ad Slot
 
NLR Logo
We collaborate with the world's leading lawyers to deliver news tailored for you. Sign Up to receive our free e-Newsbulletins

 

Sign Up for e-NewsBulletins