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03 October 2016

EBA publishes final Guidelines on implicit support for securitisation transactions

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These Guidelines clarify what constitutes arm's length conditions and specify when a transaction is not structured to provide support for securitisations. The Guidelines will contribute towards the successful implementation of the Commission's securitisation package under the CMU reform.

The Capital Requirements Regulation (CRR) sets out restrictions on the provision of implicit support to securitisations, as this raises supervisory concerns and undermines the achievement of significant risk transfer.

If originator or sponsor institutions fail to comply with the relevant requirements, they shall, at a minimum, hold own funds against all of the securitised exposures as if such exposures had not been securitised.

These European Banking Authority‘s (EBA) Guidelines propose an objective test for the definition of arm's length conditions and for assessing when a transaction is not structured to provide support.

Furthermore, guidance is provided on the notification requirements applicable to such transactions and provisions are included to avoid a scenario whereby support is provided on behalf of the originator by another entity. 

The final Guidelines take into account the feedback received during the public consultation and should be read in conjunction with the Guidelines on significant risk transfer.   

Press release

Final report


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