On 27 July 2023, the Prudential Regulation Authority (PRA) published a consultation paper, CP15/23: Securitisation: General requirements.

The Securitisation Regulation is retained EU legislation that aims to address behavioural risks in securitisation markets. Following the enactment of the Financial Services and Markets Act 2023, HM Treasury plans that most firm-facing provisions of the Securitisation Regulation will be replaced with PRA and/or FCA rules.

This consultation paper sets out the PRA’s proposed rules to replace retained EU law requirements on PRA-authorised persons in: (i) provisions of the Securitisation Regulation for which the PRA has supervisory responsibility; (ii) the related Risk Retention Technical Standards; and (iii) the related Disclosure Technical Standards.

The consultation paper also covers adjustments to the scope of PRA supervisory statement (SS) 10/18 – Securitisation: General requirements and capital framework. Further, it explains the circumstances in which the PRA envisages using a new power under section 138BA of the Financial Services and Markets Act 2000 for disapplying or modifying proposed rules on the use of resecuritisations.

The provisions in CP15/23 would results in:

  • A new securitisation part of the PRA Rulebook.
  • Changes to SS10/18.
  • A new statement of policy – Permissions for re-securitisations.

The PRA’s proposals relating to the replacement of the relevant provisions in the Securitisation Regulation, the Risk Retention Technical Standards, and the Disclosure Technical Standards would largely preserve current requirements when retained EU law is transferred to the PRA Rulebook. These requirements would advance the PRA’s objectives, including by promoting the safety and soundness of PRA-authorised investors in securitisations.

The deadline for feedback to this consultation is 30 October 2023.