This Monday, October 10th, the European Commission (EC) published their long-awaited review of the functioning of the EU Securitization Regulation. Of particular note is the EC’s interpretation of mandated EU investor due diligence and transparency requirements. Specifically, the EC stated that “it is not appropriate to interpret [the regulation] in a way that would leave it to the discretion of the institutional investor to decide whether or not they have received materially comparable information,” and acknowledging that their interpretation effectively excludes EU institutional investors from investing in non-EU securitizations unless the investors have access to the specific mandated asset-level disclosure.
More encouragingly, consistent with SFA’s advocacy, the EC raised the possibility of amending the disclosure requirements and have requested that the ESMA review their disclosure templates, while considering “whether information on a loan-by-loan basis is useful and proportionate to investors’ needs for all types of securitizations.”
SFA will be hosting a call this morning Friday, October 14th at 9:00am ET to discuss the details of the EC’s report and its potential implications for our market. If you would like to join this call, please reach out to Jeff Gudiel.