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EBA Consults on Draft Guidelines on Implicit Support for Securitisation Transactions

Compliance Week | January 20, 2016

The European Banking Authority (EBA) launched today a public consultation on draft guidelines on implicit support for securitisation transactions. The objective of the guidelines is to provide clarity on what constitutes arm’s length conditions and when a transaction is not structured to provide support for securitisations. The consultation runs until 20 April 2016.

The Capital Requirements Regulation (CRR) foresees restrictions on the provision of implicit support to securitisations, as this raises significant supervisory concerns and undermines the achievement of significant risk transfer. If originator or sponsor institutions fail to comply with the relevant requirements, they shall, at a minimum, hold own funds against all of the securitised exposures as if such exposures had not been securitised.

The...

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