New technical standards on risk retention requirements for securitisation
On 19 October 2023, Commission Delegated Regulation (EU) 2023/2175 of 7 July 2023 was published (the "Delegated Regulation"). The Delegated Regulation supplements the Regulation (EU) 2017/2402 (the (“EU Securitisation Regulation”) with regard to regulatory technical standards (the “RTS”), specifying in greater detail the risk retention requirements for originators, sponsors, original lenders and services.
The RTS, in accordance with Article 6(7) of the EU Securitisation Regulation, specify the risk retention requirements and, in particular: (i) requirements on the methods of retaining risk; (ii) the measurement of the level of retention; (iii) the prohibition on hedging or selling the retained interest; (iv) the conditions for retention on a consolidated basis; (v) the conditions for exempting transactions based on a clear, transparent and accessible index; (vi) the methods of retaining risk in case of traditional securitisations of non-performing exposures; and (vii) the impact of fees paid to the retainer on the effective material net economic interest.
The Delegated Regulation repealed the Commission Delegated Regulation (EU) 625/2014.
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