03 July 2018

ESMA publishes the responses to its Consultation on securitisation repositories

London Stock Exchange Group

LSEG believes that it is logical to have a single harmonised approach for firms already registered under EMIR, SFTR and finally Securitisation. Furthermore, it  strongly supports the principle that an extension of an existing registration should result in a lower fee, compared to a new registration.

However, due to the fact that ESMA is already in possession of much of the information required, LSEG believes a TR already registered under EMIR and SFTR should be subject to a further deduction of the proposed fee.

LSEG supports the principle that TR fees should be proportional to the TR turnover. This appears to be a simple and equitable solution.  However, it does not believe ancillary services should be included in the calculation of fees as supervisory efforts are essentially related to core reporting activities only.

Full LSEG response

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Dutch Securitisation Association

Given the very specific nature of a securitisation repository and the fact that most of the documents will have to be resubmitted (most information changes at least every year in some respects), DSA is surprised by the extension of registration fee being set as low as 50%. It is concerned that this may be an incentive for existing EMIR or SFTR repositories to enter the securitisation world opportunistically.

DSA wonders whether (the treatment of) ancillary services in securitisation should be the same as for EMIR or SFTR. In securitisation, an industry with, as you correctly state in Par 31., “already widespread use of third parties”, ancillary service providers compete with many other players, and a fee based on their ancillary income, would put them in a serious competitive disadvantage.

Full Dutch Securitisation Association response

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EuroABS

From their perspective, the main considerations it wishes to address in our response are;

That the regulation and registration fee structure should not be unnecessarily discriminatory towards smaller companies entering this market.

That consideration should be given to ensuring that the currently distorted market within the provision of securitisation repository services for ECB collateral eligibility does not impose similar distortion upon the provision of securitisation repository services for the Securitisation Regulation.

That the uncertainty about the absolute level of annual supervisory fees to be levied upon SRs should be resolved.

That the absolute level of annual supervisory fees should be kept within bounds which will neither restrict entry to companies which can afford prolonged loss-making nor unduly disincentivise public securitisation issuance.

It thinks the SR market is much smaller than the TR market and will not support similar levels of fees.

SR revenue levels will take time (years) to build before plateauing  - therefore given prevailing revenues for substantially similar services and current suggested fee levels and other SR expenses, SRs could be forced to run at a loss for a protracted period.

Disclosure requirements for the SR application appear to EuroABS to be excessive; EuroABS considers that ESMA might be able to safely reduce the burden on applying SRs and itself by re-examining and paring back these requirements.

EuroABS considers fair, equal and open competition is very important in all markets and asks ESMA to consider that market dominance in existing repository services could lead to heterogeneity in turnover of new entrants to the SR market which could result in flat registration fees being discriminatory.

EuroABS considers that any revenues generated by any SR that are not directly related to SR data (which becomes SR data only after it is accepted by an SR) is out of scope for consideration as SR revenue eligible for consideration for the calculation of SR fees.

EuroABS think it would be reasonable for ESMA to impose an annual supervision fee equivalent to no more than 5% of the relevant SR’s previous year’s turnover, subject to a minimum of €30k.

Full EuroABS response

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Consultation Paper Fees Securitisation Repositories

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