|The joint ESAs have issued two draft RTS (as contemplated by Article 42 of the Securitisation Regulation) concerning clearing and collateralisation of derivatives entered into by STS issuers. The proposal is to align the rules with those that already exist for covered bonds. By way of background:
The draft RTS are relevant to STS issues only in those rare cases where an SSPE could otherwise be caught be the clearing or margining requirements, and operate by extending the covered bond exemption to STS issues, which makes sense. Non-STS issues are not covered by them, but even so the clearing and collateral requirements should rarely apply, but it is important to be aware of them so that they are not a trap for the unwary. The consultation runs until 15th June.