On 21 April 2023, the European Banking Authority (EBA) published a Consultation Paper on guidelines on the simple, transparent and standardised (STS) criteria for on-balance-sheet securitisation under Article 26a(2) of the Securitisation Regulation.
The main objective of the guidelines is to provide a single point of consistent interpretation of those criteria and ensure a common understanding of them by the originators, original lenders, securitisation special purpose entities (SSPEs), investors, competent authorities and third party verification agents verifying STS compliance in accordance with Article 28 of the Securitisation Regulation, throughout the EU.
The guidelines will be applied on a cross-sectoral basis throughout the EU with the aim of facilitating the adoption of the respective criteria, which is one of the prerequisites for the application of a more risk-sensitive regulatory treatment of exposures to securitisations compliant with such criteria, under the EU securitisation framework for institutions updated by the Capital Markets Recovery Package in 2021.
The guidelines should therefore play an important role in the updated EU securitisation framework, which has been applicable since January 2019 and was subject to a further update in 2021, and aim to contribute to a revival of sound and safe securitisations market in the EU and help recovery from the COVID-19.
The deadline for feedback to the consultation is 7 July 2023.
Once finalised, the guidelines will be translated into the official EU languages and published on the EBA website.