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Capital Markets Union: Adoption of new securitisation rules

18/01/2018

On October 26, 2017 the European Parliament voted on and approved the new Securitisation Regulation (SR) and Securitisation Prudential Regulation (SPR).

On October 26, 2017 the European Parliament voted on and approved the new Securitisation Regulation (SR) and Securitisation Prudential Regulation (SPR). The SR consolidates the patchwork of legislation governing European securitisations, and introduces the long awaited rules for issuing simple, transparent and standardised (STS) securitisations. The SPR replaces the provisions of the Capital Requirements Regulation (CRR) relating to securitisation, and sets out the framework under which certain institutional investors (e.g. banks and investment firms) can benefit potentially from more favourable regulatory capital treatment for STS securitisation exposures The new securitisation rules set the risk retention requirement at 5% in accordance with existing international standards. The new rules will enter into force twenty day after publication in the Official Journal.

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