Everything You Need to Know About the Securitisation Regulation (STS)
In late 2017, a new securitisation regulation was published in the Official Journal of the European Union. It outlined the EU’s efforts to establish a capital markets union, by creating a single market for investment services and activities. New reporting templates were introduced as part of the new regulation. While the new templates are based on the European Central Bank templates which ED has been working on for more than five years, they are by no means the same. As a natural next step, European DataWarehouse aims to become the first securitisation repository under the new regulation.
What is the Securitisation Regulation (EU) 2017/2402 (STS)?
The STS Regulation is made up of two distinct sets of rules. The first part consists of rules that apply to ALL European securitisations. The second part includes definitions and rules concerning the “simple, transparent and standardised securitisations” (STS) label. Under the new regulation, organisations must disclose details of every securitisation to a data repository (such as ED) in order to comply with the disclosure requirements.
What is the scope of the Regulation and who is impacted?
The new regulation requires all originators, sponsors, and securitisation special purpose entities (SSPEs) to disclose information on all new securitisations issued on or after January 1, 2019 and any outstanding securitisations which seek the STS label.
What is the STS Label?
The European Commission has introduced a special STS label to create incentives for issuers, sponsors and SSPEs. Securitisations seeking this label must comply with the disclosure requirements AND must meet a number of additional criteria for simplicity, transparency and standardization outlined in the regulation.
What are the key changes?
If we look at the regulation closely, there are several key changes that will impact our clients. Changes to the templates include numerous revisions and additions, changes to no-data options, and additional templates for CLOs, Esoteric and non-performing exposures.
How can my organisation prepare?
Organisations should begin to prepare from technical and procedural standpoints and should inform themselves on the required changes in their IT systems for reporting purposes. This includes understanding the new reporting templates as well as changes between existing ECB and new ESMA ABS templates which are currently available in draft form.
What is ED doing to help?
The good news is, we’ve already taken several steps to help your organisation prepare.
- We’ve prepared a gap analysis, which highlights the differences between existing ECB templates and those introduced by ESMA as part of the upcoming regulation
- We’ve released a regulatory solution on our EDitor platform which allows your organisation to test the ESMA templates for free.
- We’re hosting a series of webinars and workshops to keep you informed about the latest developments.
- We’re experienced. Our team comes with template expertise and our experience with ECB templates has given us the knowledge we need to prepare both our systems and team for the regulation. We’re offering our clients ongoing support and technical advice as they transition to the new templates.
We’re committed to helping you navigate these changes. Please be sure to check our blog often for regulatory updates and news. We’ll continue to update this post with important developments as well. In the meantime, do not hesitate to contact us at firstname.lastname@example.org