European Supervisory Authorities Publish Consultation Paper on Sustainability Disclosures for Simple, Transparent and Standardized Securitizations05/02/2022The European Banking Authority, European Insurance and Occupational Pensions Authority and European Securities and Markets Authority have published a consultation on draft Regulatory Technical Standards for disclosures on sustainability indicators in simple, transparent and standardized securitizations. Responses to the consultation should be submitted by July 2, 2022.
The EU Securitization Regulation was recently amended, as part of the EU Capital Markets Recovery Package, to provide for the optional disclosure by originators of adverse sustainability impacts arising from the assets financed by underlying securitization exposures. The draft RTS will standardize the type and presentation of information that a securitization originator may choose to disclose in this respect. The consultation seeks feedback on the proposed methodologies, content and presentation of information in the draft RTS.
Similar rules are due to be adopted for other financial products through draft RTS under the EU Sustainable Finance Disclosure Regulation. The EU SFDR does not cover securitizations, hence the need for separate rules. Disclosures under the EU SFDR will be mandatory, unlike the optional disclosures proposed under the draft Securitization Regulation RTS. However, the ESAs have aimed to ensure a high degree of consistency between the two sets of rules.
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