The Securitisation Regulation (“SR”) (Regulation (EU) 2017/2402) consolidates and enhances existing regulatory rules applicable to securitisations. It also creates direct compliance obligations for originators, original lenders and securitisation special purpose entities (“SSPEs”), with sanctions available for non-compliance.
Two important themes arise from the SR which are of note to originators:
- a further increased focus on transparency and disclosure, with a view to enabling investors to meet their new, more rigorous, investor due diligence requirements; and
- new asset selection and credit granting rules.
We have identified seven key issues for originators to consider, which are set out below. This article focusses on standalone securitisation; the application of the SR to ABCP differs in a number of respects and should be considered separately.