On 16 October 2023, the FCA published an Addendum to its consultation paper CP23/17 on proposed rules for the UK securitisation markets. The Addendum makes changes to the draft Handbook text published in Appendix 1 of CP23/17 in relation to the application of due diligence requirements and institutional investor delegation.
CP23/17 makes references to Occupational Pension Schemes (OPS) to indicate that such schemes will continue to be regulated by the Pensions Regulator. In addition to this, paragraph 4.17 of CP23/17 sets out an exception to the new proposed rules on delegation, which would apply where an institutional investor that is subject to FCA rules delegated the investment decision to an OPS. However, the FCA flags in the Addendum that the draft Handbook text implied that the scope of the persons subject to this exception was wider than just OPS.
The changes shown in the Annexes to the Addendum are consistent with the policy position as set out in CP23/17 and the FCA proposes to insert them into the instrument as indicated. Any responses to CP23/17 should be made on the basis that the changes are made. Although the policy intention (and, consequently, the cost benefit analysis) set out in CP23/17 has not changed, the consultation period has been extended by 3 weeks, until 20 November 2023, for Chapter 4 (Due diligence requirements for institutional investors) to allow respondents time to consider the changes made by the Addendum. The consultation period for all other aspects of CP23/17 will still close on 30 October 2023.