Cadwalader highlighted several insights from the Commercial Real Estate Financial Council conference, which took place on January 14-16, 2019.
According to Cadwalader, market participants described the effect of the EU risk retention rules on U.S. commercial mortgage-backed securities ("CMBS"), and urged clarity on specific requirements. Attendees expressed uncertainty concerning compliance with CMBS reporting requirements.
In particular, participants discussed timing considerations regarding the European Securities and Markets Authority ("ESMA") templates. Cadwalader noted that ESMA is in the midst of redrafting these templates, which the European Commission previously declined to endorse. Cadwalader stated that the updated proposed templates could be available by as early as the end of January, but are not likely to make it through the administrative adoption process until late spring or early summer. Upon the conclusion of this process, Cadwalader said, "they are expected to apply immediately, without any further implementation period."
In addition, Cadwalader stated that the information in these templates could expand what is currently captured for U.S. CMBS deals. Cadwalader said that coordination among issuers, loan sellers, servicers and trustees will be necessary to ensure compliance for those transactions that must be EU risk retention-compliant. Cadwalader noted that servicers, trustees and issuers "seemed to acknowledge the need to cooperate," and "all seemed solution-focused in working through this most recent regulatory bump in the road."
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