In May 2021, the ECB published its decision that the credit institutions it supervises will also be supervised with regard to the reporting of securitization transactions, specifically for compliance with Articles 6 (risk retention), 7 (transparency) and 8 (prohibition of re-securitization) of the European Securitization Regulation (EU) 2017/2402 and (EU) 2020/1224 (IR).
Now the ECB has issued draft guidance on how originators and sponsors should report securitization transactions to the ECB. The aim is to achieve a uniform approach to facilitate the operational implementation of the supervision of Articles 6 to 8 IR. It is explicitly not intended to introduce any new requirements.
The Guide provides that information on the following four areas must be reported both at the time of origination and during the life of a securitization transaction:
- First, the material information about a securitization transaction;
- second, the nature of the securitized exposures;
- third, information on the securitization exposures created; and
- fourth, a confirmation of compliance with the requirements of Articles 6 to 8 IR.
Upon initial analysis, the ECB's proposals appear to be a reasonable compromise. On the one hand, uniform reporting is essential for efficient supervision. On the other hand, additional reporting requirements for credit institutions must be kept to an absolute minimum, as the existing transparency requirements for securitizations are already far above the requirements for other financial products in the EU.
TSI will accompany the consultation and prepare an opinion. The deadline is January 5, 2022, with the final guidance to be applied from April 1, 2022.
To view the ECB's guidance document in the consultation