Shearman & Sterling LLP | Financial Regulatory Developments Focus | UK Conduct Regulator Consults on Rule Alignments for EU Securitization Framework
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  • UK Conduct Regulator Consults on Rule Alignments for EU Securitization Framework
    08/01/2018
    The U.K. Financial Conduct Authority has launched a consultation on proposed changes to its rules to ensure consistency with the provisions of the directly applicable EU Securitization Regulation (also known as the STS Regulation) and related amendments to the Capital Requirements Regulation, which take effect across the EU on January 1, 2019. This forthcoming EU legislation will introduce a new framework for simple, transparent and standardized securitizations, intended to make the EU securitization market function more effectively.

    The Securitization Regulation creates a new category of entity, the Third Party Verification agent, or TPV. A TPV can be voluntarily appointed by a sponsor, originator or securitization special purpose entity to verify that a securitization complies with the STS criteria, so as to attain classification as Simple, Transparent and Standardized. TPVs will be authorized and supervised by national regulators. The FCA proposes to open an application gateway for prospective TPVs from September 2018 and is seeking feedback on the fees it proposes to charge for new applications and variations of permission.

    The FCA also seeks feedback on other, consequential, changes to various parts of its Handbook to align them with the EU measures and to delete or replace any provisions that the EU measures supersede. These consequential amendments affect the FCA glossary and certain parts of the Handbook that relate to collective investment schemes and alternative investment funds.

    Comments on the consultation are invited by October 1, 2018. The FCA plans to publish a policy statement in December 2018.

    View the consultation (FCA CP 18/11)

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    TOPICS: FundsSecurities