On 30 July 2019, the FCA published Consultation Paper 19/26: Draft technical standards on the content and format of STS notifications under the onshored Securitisation Regulation (CP19/26).
The European Securitisation Regulation (the EU Securitisation Regulation) came into effect on 1 January 2019. It is part of the Capital Markets Union action plan, outlines the general requirements for securitisation in the EU and introduces a new class of simple, transparent and standardised (STS) securitisations, which can attract preferential capital treatment.
The EU Securitisation Regulation is already in force but certain technical standards have been delayed. If these technical standards become operative whilst the UK is still a member of the EU they will apply directly and will be brought into UK law when the UK leaves the EU in a no deal scenario as part of the onshoring process under the European Union (Withdrawal) Act 2018 (EUWA). However, if the technical standards become operative after the UK leaves the EU in a no deal scenario they will fall outside the scope of the EUWA powers. Therefore, in order to have the technical standards in force in the UK, the FCA can make the standards under the powers it will have on exit but must consult on them. The proposals in CP19/26 prepares for that circumstance.
In particular, in CP19/26 the FCA introduces the following proposals and accompanying draft instruments for:
- the technical standards specifying the information that originators and sponsors are required to provide to comply with the STS notification requirement; and
- the technical standards establishing the templates to be used for the provision of the required information in the above mentioned technical standards.
The deadline for comments on CP19/26 is 27 August 2019. The FCA expects to publish the final standards in a Policy Statement on or shortly before 31 October 2019.