CP19/26: Draft technical standards on the content and format of STS notifications under the onshored Securitisation Regulation

Open consultation: CP19/26
30/07/2019
30/07/2019
Consultation closes
27/08/2019

We continue to prepare for a range of scenarios, including one in which the UK leaves the EU without a withdrawal agreement and implementation period having been ratified between the UK Government and the European Union (EU). This is the first consultation paper (CP) setting out our proposed technical standards for the onshored Securitisation Regulation.

Read CP19/26

We are consulting on proposed UK technical standards in the event the UK leaves the EU on October 31 without an implementation period and the relevant EU technical standards have not been brought into UK law as part of the EU Withdrawal Act. We seek to ensure that we have adequate technical standards to support a well-functioning Simple, Transparent, and Standardised (STS) securitisation market in the UK and can effectively supervise firms’ compliance with the requirements of the onshored Securitisation Regulation on Exit day assuming a no-deal Brexit.

Why we are consulting now

In the event of a no-deal Brexit, we have worked to put the necessary arrangements in place to ensure that the securitisation market can continue to work effectively. The Securitisation (Amendment) (EU Exit) Regulations 2019 transfers from the European Securities and Markets Authority (ESMA) to us the responsibility for receiving UK STS notifications and maintaining a list of UK STS securitisations on our website.

CP19/26 introduces our proposals and the accompanying draft instruments, for the technical standards:

  • specifying the information that originators and sponsors are required to provide to comply with the STS notification requirement
  • establishing the templates to be used for the provision of the required information in the above mentioned technical standards

Summary of our proposals

Our proposed technical standards are consistent with the draft technical standards on STS notification which ESMA has previously consulted on in an EU context. Those draft ESMA standards are laid out in their final report and will be well known to UK participants in the securitisation market.

Who this applies to

These proposals will be of interest to anyone involved in securitisations, including:

  • firms involved in securitisation markets either as investors or manufacturers (originators, sponsors or securitisation special purpose entities (SSPEs)) of securitisations
  • individuals holding offices or positions involving responsibility for taking management decisions at originators and sponsors
  • third party verifiers assessing compliance with STS criteria

What you need to do

Please send us your comments on our proposed technical standards by 27 August 2019.

Online response form

You can also:

  • email your responses to [email protected] or 
  • write to: Paul Johnson, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN

We are proposing a 4-week consultation because:

  • These proposed FCA standards are consistent with those published by ESMA and are familiar to UK stakeholders, having been subject to previous consultations in a European context.
  • A longer consultation period could risk the standards not being operative on Exit day assuming a 31 October 2019 no-deal Brexit. The proposed 4-week consultation period will expedite the making of new FCA standards. We think this is important to market participants, particularly as compliant STS securitisations may attract preferential capital treatment.

Next steps

We will consider your feedback and plan to publish our final or near-final technical standards in a Policy Statement (PS) on or very near to Exit day.

We intend to publish further consultations covering the rest of the technical standards.