|Author (Corporate)||Council of the European Union, European Parliament|
|Series Title||Official Journal of the European Union|
|Series Details||L 116, Pages 1-24|
|Content Type||Legislation, Policy-making|
Regulation (EU) 2021/557 - adopted by the co-legislators on 31 March 2021 - introducing amendments to Regulation (EU) 2017/2402, which provides a framework for securitisation and creates a specific framework for simple, transparent and standardised (STS) securitisation. This is a text with EEA relevance.
Regulation (EU) 2017/2402 - also known as the CRR Regulation - created a general system to simplify rules for all securitisations and to identify simple, transparent and standardised securitisations. Securitisation is a tool through which banks can bundle loans, turn them into securities, and sell them onto capital markets. It can play an important role in enhancing the capacity of institutions to support the post-pandemic economic recovery, providing for an effective tool for funding and risk diversification for institutions.
This proposal extends the STS framework to on-balance-sheet synthetic securitisation through its eligibility criteria. It also amends other cross-sectoral provisions. The draft law was tabled by the European Commission on 24 July 2020 as part of the so-called EU Capital Markets Recovery Package. It builds on reporting undertaken by the European Banking Authority (EBA). The Council of the European Union adopted its general approach on 16 October 2020. The European Parliament's relevant committee adopted a negotiating position on 10 November 2020, which was confirmed by plenary on 13 November. An informal agreement between the co-legislators on a compromise text was reached on 16 December. Following formal endorsement by the Council and Parliament, the Act was signed on 31 March 2021. It was published in the Official Journal on 6 April 2021.
|Subject Categories||Business and Industry, Economic and Financial Affairs|
|Subject Tags||Capital Markets Union [CMU], Financial Services|
|Keywords||Banks | Banking, COVID-19 (Coronavirus)
|International Organisations||European Union [EU]|