Rumours abound that the EC will issue something shortly, possibly rejecting the revised ESMA 339-page proposed RTS and ITS on disclosure. The official deadline for the EC to accept or reject them was 22nd November and this has passed without it doing either. If it rejects, ESMA has 6 weeks to respond, which takes us into January, meaning we would get to the 1st January start date for the Securitisation Regulation with no RTS or ITS about disclosure. This would mean article 7 (on disclosure) would come in alongside article 43(8), which says (in wording which is not as clear as it might be) that until the RTS are adopted by the EC, information on underlying disclosures and quarterly investor reports is to be disclosed using the templates in Annexes I to VIII of CRA III. As readers know, as it stands, it would be impossible for ABCP conduits to comply (they are asked to disclose information they have no ability to get), the level of disclosure required for NPL securitisations is difficult, and if they came in they would require CLOs to comply – at present they do not have to. Meanwhile, final RTS are expected from the EBA before year end on risk retention and homogeneity , plus its “guidelines” on the application of the STS requirements, and on 12th November ESMA published its final advice (including draft RTS) on securitisation repositories: these must be used for public securitisations to comply with the Article 7 transparency and disclosure requirements to make available (to existing investors, competent authorities and, upon request, to potential investors) transaction documents, standardised loan-level data, investor reports, any STS notification, etc. It is technical and seemingly fairly uncontroversial. These will not be done by 1st January 2019, and until they are any public disclosure has to be via a website that meets the requirements of Article 7(2) of the Securitisation Regulation. ESMA said last week that it had no powers to supervise any such website, nor to declare any website compliant, so perhaps we should not expect many public issues in Q1 2019.
Head of Knowledge Management (Finance and Projects)
Mark Daley joined DLA Piper in 2015 after over thirty years’ experience as a debt finance lawyer in private practice in London and Hong Kong.