Analysis of the EBA on the Functioning of the Securitisation Regulation
The European Banking Authority (EBA), in collaboration with the Joint Committee of the European Supervisory Authorities (ESAs), has published a comprehensive analysis of the functioning of the Securitisation Regulation (Regulation (EU) 2017/2402, SECR). This study evaluates the effectiveness of the regulation since its implementation in 2019 and provides valuable insights into its impact on the European securitisation market. The primary objective of the analysis is to identify successes, existing challenges, and potential areas for improvement. The report thus serves as a crucial foundation for the ongoing evaluation of the regulatory framework by the European Commission and could influence future legislative adjustments.
Key Findings of the Analysis
- Market Resilience and Stability
The analysis demonstrates that SECR has significantly contributed to the resilience of the European securitisation market without substantially impairing financial flows to the real economy. It underscores the importance of the securitisation market for the European Capital Markets Union and the long-term goal of establishing a robust savings and investment market. - Implementation of the STS Framework
The STS (Simple, Transparent, Standardised) framework has facilitated greater standardisation of securitisation transactions. The analysis indicates that the regulatory requirements for risk retention, due diligence, and disclosure are generally effective, although there remains room for improvement in their practical application. - Challenges in Definition and Implementation
Some market participants have expressed uncertainties regarding the definition of securitisation, particularly concerning single-tranche structures and credit fund transactions. Additionally, regulatory fragmentation within the EU has led to inconsistencies in the enforcement of requirements. - Need for Improved Transparency Requirements
The analysis highlights the continued need for enhancements in transparency requirements, particularly in the area of private securitisations. The supervisory authorities recommend stronger harmonisation and clearer guidelines to provide market participants with better orientation.
Recommendations for Regulatory Adjustments
- Coherent Supervisory Practices: Uniform and well-defined supervisory practices should reduce existing regulatory inconsistencies between member states, thereby enhancing legal certainty.
- Clarification of the Securitisation Definition: A more precise definition could prevent market distortions and reduce regulatory uncertainties.
- Enhanced Disclosure Requirements for Private Securitisations: Improved transparency requirements could strengthen market integrity and enable investors to conduct more informed risk assessments.
The findings of this study are expected to play a pivotal role in shaping future regulatory developments in the European securitisation market.
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