Two regulations amending the EU Securitisation Regulation and the Capital Requirements Regulation (the "CRR") respectively have now come into force. Regulation (EU) 2021/557 of the European Parliament and of the Council (the "SR Amendment Regulation") and Regulation (EU) 2021/558 of the European Parliament and of the Council (the "CRR Amendment Regulation", and together, the "Amendment Regulations"), were published on 6 April 2021 in the Official Journal and came into force on 9 April 2021.
The Amendment Regulations, among other things, implement an STS (simple, transparent and standardised) framework for balance sheet synthetic securitisations and make certain amendments with respect to securitisations of non-performing exposures ("NPEs"), both of which are changes which market participants have been keenly awaiting. They also make certain other changes, including amendments to the restrictions on the jurisdictions in which a securitisation special purpose entity ("SSPE") may be established and setting out a mandate for the European Banking Authority (the "EBA") to produce a report on sustainable securitisation.
In this Legal Update, we summarise and consider the Amendment Regulations. We note, of course, that the Amendment Regulations are EU regulations and so will not be applicable in the UK, which is now subject to a separate securitisation regime which is similar but not identical. We are not currently aware of any plans by the UK regulators to make corresponding changes to the EU Securitisation Regulation as it now applies in the UK6, or the CRR as it forms part of "retained EU law" in the UK, and so the Amendment Regulations (for now) represent a divergence between the UK and EU regimes.
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