Last Friday afternoon the ESAs published their anticipated statement regarding disclosure (article 7) and consolidated application (article 14) of the Securitisation Regulation. The problems are well known (Finbrief, passim). Unlike the SEC in the USA, they cannot actually issue no-action letters, but they “expect National Competent Authorities to generally apply their supervisory powers in their day-to-day supervision and enforcement of applicable legislation in a proportionate and risk-based manner..” This is the same formulation as the ESAs used in February and November 2017 regarding EMIR, and it has also been used by ESMA in respect of pension funds having to clear derivatives pending the “EMIR Refit” coming into force. How the market responds will be determined by how the 28 national regulators respond; as regards the UK, the FCA statement in February 2017 was that the FCA expected firms to use “best efforts” even though it accepted they might nevertheless not comply (this is known as “comply or explain”). The letter notes that “ESMA and the Commission are currently considering how to address market concerns raised about some aspects of the ESMA disclosure templates. These templates are therefore unlikely to be adopted by 1 January 2019”. It refers to “severe operational challenges for reporting entities in complying with these transitional provisions, in particular for those reporting entities that have never provided information according to the CRA3 templates”; which “implies that reporting entities may need to make substantial and costly adjustments to their reporting systems to comply with the CRA3 templates on a temporary basis, until the ESMA disclosure templates enter into application”. The ESAs say they expect these difficulties will be solved with the subsequent adoption of the ESMA disclosure templates – which probably means the templates-as-amended, but doubtless will become clearer as we see how ESMA responds. The ESA letter also similarly addresses the well-known transparency and risk retention issue for non-EU subsidiaries: pending the amendment currently going through trilogue to correct the CRR Article 14 problem, national regulators are expected to go gently regarding compliance by non-EU subsidiaries with the Securitisation Regulation transparency and risk retention rules.