Simple, Transparent and Standardised Securitisations: All Clear Now?

It has been six months since the new EU Securitisation Regulation, together with amendments to the Capital Requirements Regulation (the CRR), created a new framework for certain simple, transparent and standardised term securitisations and asset-backed commercial paper programmes (collectively, STS securitisations). Unlike other provisions of the Securitisation Regulation, such as risk retention, due diligence and transparency (covered in our recent client briefing), which apply to all securitisations, the STS regime is optional. Effectively, there are now two different classes of EU securitisations: STS and non-STS, differentiated on the basis of whether or not they meet the STS criteria, the former giving credit institution and insurance company investors significant prudential advantages relative to the latter.

In this briefing we consider how the STS regime is operating and how it may be impacted by Brexit.