EU Securitisation Regulation ESMA STS Notification Template

• The Securitisation Regulation applies to all securitisation products and includes rules on due diligence, risk retention, and transparency.
• ESMA is responsible for maintaining a list of securitisations that meet the STS requirements and for which notifications have been submitted using the relevant templates.
• The STS framework has been extended to synthetic securitisations through an amended regulation in April 2021.
• Two technical standards on STS notifications were published in the Official Journal of the European Union in September 2020 and July/October 2022, respectively.
• Lawyers and compliance officers should ensure that their clients' securitisation notifications meet the updated requirements, particularly with regards to synthetic STS securitisations.

The Securitisation Regulation confers several tasks on ESMA, including the consistent application and enforcement of STS criteria and monitoring of securitisation markets.

The European Union's Capital Markets Union has been bolstered by the Securitisation Regulation, which applies to all securitisation products and includes rules on due diligence, risk retention, and transparency. One key aspect of this regulation is the identification of simple, transparent, and standardised (STS) securitisations, which are subject to specific criteria. These criteria include the tranching of credit risk associated with an exposure or a pool of exposures, among other characteristics. The Securitisation Regulation confers several tasks on the European Securities and Markets Authority (ESMA), including the consistent application and enforcement of STS criteria and monitoring of securitisation markets. ESMA is responsible for maintaining a list of securitisations that meet the STS requirements and for which notifications have been submitted using the relevant templates.

The Securitisation Regulation has undergone several updates, with the most recent amendments extending the STS framework to synthetic securitisations. This change was implemented through an amended regulation in April 2021. In addition, two technical standards on STS notifications were published in the Official Journal of the European Union in September 2020 and July/October 2022, respectively. These standards entered into force on 23 September 2020 and 15 August/2 November 2022, respectively. The amendments to the regulation and technical standards aim to enhance transparency and consistency in securitisation markets.

Lawyers and compliance officers should be aware of the updated requirements for securitisation notifications, particularly with regards to synthetic STS securitisations. These entities must ensure that their clients' notifications meet the new framework, which includes specific criteria for identifying STS securitisations. Furthermore, they should monitor ESMA's STS Register for updates on notified securitisations and be aware of the changes to the previous STS list for traditional securitisations. The STS register facilitates the notification of STS securitisations by reporting entities to ESMA, replacing the previous list for non-ABCP securitisations, ABCP securitisations, and ABCP programmes.

Lawyers and compliance officers should ensure that their clients' securitisation notifications meet the updated requirements, particularly with regards to synthetic STS securitisations, which are now subject to the new framework. They should also monitor ESMA's STS Register for updates on notified securitisations.

Source: Original reporting via EU Securitisation Regulation