MFSA issues circulars on Securities Regulations updates

by , on Jun 30, 2021 02:35:46 PM

The Malta Financial Services Authority (MFSA) has issued circulars on Regulation (EU) No 2017/2402 (Securitisation Regulation), in relation to ESMA’s updates of the Q&A and the Security Transparency draft Regulatory Technical Standards (RTS) published by the European Commission.

Circular on Q&A Updates by ESMA  

On the 15th November 2019, the European Securities and Markets Authority (ESMA) updated its Questions and Answers (Q&As) on the Securitisation Regulation. The Q&A is intended to provide responses to questions asked by key market players, thus promoting common application and supervision of the Securitisation Regulation across all Member States. The document includes both new Q&As as well as modifications, and these updates affect a number of chapters, including:

  •         Securitisation Repositories;
  •         STS Notifications;
  •         General questions on Disclosure Requirements and Templates;
  •         Underlying exposures related to commercial and residential real estate.

ESMA will be updating this document regularly, and further questions may be submitted through ESMA’s website.

Circular on publication of Securitisation Transparency RTS by European Commission

On the 16th October 2019, the European Commission published a Commission Delegated Regulation on the draft RTS under the Securitisation Regulation, which has been applicable since 1st January 2019.

The Delegated Regulation is based on ESMA’s draft regulatory technical standards published on 31st January 2019, which ESMA is empowered to publish under the Securitisation Regulation, along with the related implementing technical standards (ITS). ESMA’s draft RTS specify the information and the details of securitisation which must be made available by the originator, sponsor and Securitisation Special Purpose Entity (SSPE).

The Draft RTS must be approved by the European Parliament and the Council of the European Union during a three-month non-objection period. Once approved, they will come into force on the twentieth day following their publication in the Official Journal of the European Union, thus it is expected that the Draft RTS will come into force in February 2020. Disclosure requirements affect both investors in conducting due diligence and agencies in their efforts at monitoring the securitisation markets, thus market participants must be prepared to comply with the pertinent requirements accordingly.

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