Regulation (EU) 2021/557 amending Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation to help the recovery from the COVID-19 crisis

Summary:

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.

Further information:

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.

• Primary Source

Official

EUR-LEX: COM(2020)282: Proposal for a Regulation amending Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation to help the recovery from the COVID-19 pandemic https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2020:282:FIN

EUR-Lex: SWD(2020)281: Staff Working Document accompanying the Proposal https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2020:120:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on General framework for securitisation and specific framework for simple, transparent and standardised securitisation to help the recovery from the COVID-19 pandemic (2020/0151(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2020/0151(COD)

European Commission: Publications: Coronavirus response: How the Capital Markets Union can support Europe’s recovery https://ec.europa.eu/info/publications/200722-proposal-capital-markets-recovery_en

European Parliament: Legislative Train Schedule: Adjustments to the EU Securisation Framework to help the recovery from the COVID-19 pandemic https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-adjustments-to-theeu-securitisation-framework/03-2021

European Commission: Press Release, 24/07/2020: Coronavirus response: Making capital markets work for Europe's recovery https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1382

European Commission: Coronavirus response: How the Capital Markets Union can support Europe's recovery (24 July 2020) https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_1377

---