Final EU Guidelines on Simple, Transparent and Standardized Criteria for Securitizations

The European Banking Authority has published two sets of finalized guidelines under the Securitization Regulation which, along with targeted amendments to the Capital Requirements Regulation, forms part of the new EU Securitization Framework for simple, transparent and standardized securitizations from January 2019. Originators and sponsors will be required to notify the European Securities and Markets Authority of any securitization that meets the STS criteria to be able to use the "STS" designation. ESMA will maintain a list of all such securitizations on its website. The Securitization Regulation establishes two sets of criteria for STS securitizations, namely for term (i.e. non-Asset Backed Commercial Paper) securitizations and for short-term (i.e. ABCP) securitizations respectively. The EBA guidelines set out further detail on the interpretation of these criteria.

The aim of the guidelines is to ensure a consistent interpretation and application of the STS criteria by the originators, sponsors, Securitization Special Purpose Entities and investors involved in the STS securitization, the national regulators designated to supervise the compliance of the entities with the criteria and third parties authorized to check the compliance of the securitization with the STS criteria.

The guidelines will apply on a cross-sectoral basis throughout the EU from May 15, 2019. However, the EBA states that it expects the guidelines to be applied from January 1, 2019.

View the guidelines on STS criteria for ABCP securitizations.

View the guidelines on STS criteria for non- ABCP securitizations.

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