CP18/22: Handbook changes to reflect the application of the EU Securitisation Regulation and the amendment to the Capital Requirement Regulation

Open consultation: CP18/22
01/08/2018
Consultation closed
01/10/2018
Policy Statement
19/12/2018
19/12/2018

The Securitisation Regulation and related amendment to the Capital Requirements Regulation (CRR) came into effect on 18 January 2018. Most of their provisions came into effect on 1 January 2019. We have consulted on a number of changes to ensure that our Handbook is consistent with the directly applicable EU Securitisation Regulation and CRR amendment.

Read CP18/22

In this Consultation Paper we proposed new application and periodic fees for the authorisation of Third Party Verifiers (TPVs) under the Securitisation Regulation. These proposals were based on the requirements of the draft European Regulatory Technical Standards and on our existing framework for setting fees. We provide more information on TPVs below.

Role of a Third Party Verifier​​​​​​ (TPV)

A TPV can be used by a sponsor, originator and Securitisation vehicle to check whether a Securitisation is compliant with Simple, Transparent and Standardised (STS) criteria, as set out by the Securitisation Regulation. Note that when using the services of a TPV, the sponsor, originator and Securitisation vehicle on one hand, and the institutional investors required to perform due diligence on the investment on the other hand, remain liable for their obligations under the regulation. 

TPV authorisation

HM Treasury has confirmed we are the competent authority for the UK and as such we will be responsible for authorising TPVs from 1 January 2019.

TPVs sending draft applications for authorisation

We are now accepting draft applications. 

For those intending to apply to be a TPV please see the draft TPV application form.  You can submit a draft application to [email protected] if you would like us to review this prior to the application process being available.

Applying to be a TPV

Subject to meeting the conditions set out in article 28 of the Securitisation Regulations, any firm can apply to be a TPV so long as they have the necessary competence to carry out the assessment of STS securitisations.

That said, TPVs cannot be:

  • insurance firms
  • credit institutions
  • investment firms
  • credit rating agencies 

Additionally, among other conditions as set out in article 28, the Securitisation Regulation require TPVs to ensure that the performance of their other activities, if any, does not compromise the independence or integrity of their assessment and in particular, TPVs cannot provide any advisory, audit or equivalent service to the originator, sponsor or securitisation vehicle involved in the securitisation which they assess.

See our current authorisation process if you are interested in becoming a TPV. While we anticipate that the final authorisation process for TPVs will be similar to this please note that some details may be different, for example, the timescales for authorisation and the conditions against which the application will be assessed.

Who this applies to

This consultation will be of interest to:

  • entities which may wish to act as TPV agents
  • firms that are involved in securitisation markets either as institutional investors or manufacturers (originator, sponsor and special purpose vehicle) of securitisations

Next steps

This consultation is now closed. The Policy Statement (PS18/25) making final rules was published on 19 December 2018.

See our Consultation Paper (CP18/30) on how we proposed to amend the Decision Procedures and Penalties Manual (DEPP) and Enforcement Guide (EG) to reflect the changes introduced by the EU Securitisation Regulation and ahead of the implementing SI that HMT has now laid before Parliament.