Developments in European regulation on securitisation

Since 20th June 2013 newly amended regulation has come into force expanding the scope and application of disclosure requirements for structured finance instruments.

The newly amended CRA3 demands that issuer, originator and sponsor of a structured finance instrument jointly publish information regarding the structured finance instrument on a website to be set up by the European Securities Markets Authority ESMA.

The information to be published is quite extensive and includes detailed credit information and performance of the underlying assets.

It further requires for any public or private structured finance transaction to be rated by two agencies. While this was fairly standard for the public transactions, this is entirely new for private deals.

Altogether this clearly represents another hurdle for securitisation in Europe, with the possible impact of falling even more behind US market growth.

Leave a Reply

Your email address will not be published. Required fields are marked *