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Amending securitisation requirements for the impact of coronavirus [EU Legislation in Progress]

Written by Angelos Delivorias (2nd edition, updated on 1.7.2021),

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Preserving the ability of banks to continue lending to companies, especially small and medium-sized enterprises, is key when it comes to softening the economic impact of the pandemic and easing recovery. The Commission believes that securitisation can contribute to this. It also considers that in order to increase the potential of securitisation the EU regulatory framework (Regulations (EU) 2017/2402 and (EU) 575/2013) must be updated, to cater for (i) on-balance-sheet synthetic securitisation and (ii) the securitisation of non-performing exposures (NPEs). The co-legislators amended the Commission proposal, with amendments concerning, among other things, the requirements concerning the credit protection agreement, the third party verification agent and the synthetic excess spread, the macroprudential oversight of the securitisation market, the obligations of the EBA, the reporting on prudential requirements and financial information, grandfathering for securitisation positions and NPE securitisations. The final act was signed on 31 March 2021.

Complete version

(A) General framework for securitisation and specific framework for simple, transparent and standardised securitisation to help the recovery from the COVID-19 pandemic and
(B) Capital Requirements Regulation (CRR): adjustments to the securitisation framework to support the economic recovery in response to the COVID-19 pandemic
Committee responsible: Economic and Monetary Affairs (ECON) COM(2020) 282 (A)
COM(2020) 283 (B)
Rapporteurs: Paul Tang (S&D, the Netherlands) (A)
Othmar Karas (EPP, Austria) (B)
2020/0151(COD) (A) 2020/0156(COD) (B)
Shadow rapporteurs: Othmar Karas (EPP, Austria) (A)
Jonás Fernández (S&D, Spain) (B)
Luis Garicano (Renew, Spain) (A, B)
Marco Zanni (ID, Italy) (A, B)
Philippe Lamberts (Greens/EFA, Belgium) (A, B)
Johan Van Overtveldt (ECR, Belgium) (A, B)
Chris MacManus (GUE/NGL, Ireland) (A, B)
Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Procedure completed. Regulation (EU) 2021/557 (A)
Regulation (EU) 2021/558 (B)
OJ L 116, 6.4.2021, pp. 1–32

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