Securitisation Regulation - FCA consultation responses due by 1 October 2018

Simple, Transparent and Standardised?

Responses to FCA consultation due by 1 October 2018

The majority of the provisions of the EU Securitisation Regulation (Regulation (EU) 2017/2402), and the proposed amendments to the Capital Requirements Regulation (via Regulation (EU) 2017/2401), will come into effect on 1 January 2019 and, in light of the upcoming regulatory changes, the Financial Conduct Authority is consulting on amendments to its Handbook.

Proposed amendments include arrangements in relation to application fees and FCA authorisation of Third Party Verification Agents (TPVs), which may be appointed by sponsors, originators or other securitisation vehicles to independently verify whether a securitisation is 'simple, transparent and standardised' (STS) in accordance with the EU Securitisation Regulation criteria. Any firm, excluding insurance firms, credit institutions, investment firms or credit rating agencies, can apply to become a TPV so long as they meet the necessary competency requirements. It will be interesting to see how many firms seek authorisation to become a TPV under the new regulations.

Other proposed amendments include consequential changes to the Investment Funds sourcebook and the Collective Investment Schemes sourcebook in relation to the obligations of Alternative Investment Fund Managers and Undertakings for Collective Investments in Transferable Securities investing in securitisations.

Responses to the consultation should be submitted to the FCA prior to 1 October 2018 and can be made through their online form.

Brodies LLP has a market leading and dedicated securitisation team with more than 20 years' experience. Marion MacInnes and Bruce Stephen are authors of the Scottish chapter of the International Comparative Legal Guide to: Securitisation 2018. More information on our securitisation credentials can be viewed here. If you require any assistance in connection with any Scottish or cross border aspects of a securitisation transaction, please contact a member of our team.