Regulation (EU) 2017/2402 of the European Parliament and of the CouncilDangos y teitl llawn

[F1 Article 43 U.K. Transitional provisions

1. This Regulation shall apply to securitisations the securities of which are issued on or after 1 January 2019, subject to paragraphs 7 and 8.

2. In respect of securitisations the securities of which were issued before 1 January 2019, originators, sponsors and SSPEs may use the designation ‘STS’ or ‘simple, transparent and standardised’, or a designation that refers directly or indirectly to those terms, only where the requirements set out in Article 18 and the conditions set out in paragraph 3 of this Article are complied with.

3. Securitisations the securities of which were issued before 1 January 2019, other than securitisation positions relating to an ABCP transaction or an ABCP programme, shall be considered ‘STS’ provided that:

(a) they met, at the time of issuance of those securities, the requirements set out in Article 20(1) to (5), (7) to (9) and (11) to (13) and Article 21(1) and (3); and

(b) they meet, as of the time of notification pursuant to Article 27(1), the requirements set out in Article 20(6) and (10), Article 21(2) and (4) to (10) and Article 22(1) to (5).

4. For the purposes of point (b) of paragraph 3, the following shall apply:

(a) in Article 22(2), ‘prior to issuance’ shall be deemed to read ‘prior to notification under Article 27(1)’;

(b) in Article 22(3), ‘before the pricing of the securitisation’ shall be deemed to read ‘prior to notification under Article 27(1)’;

(c) in Article 22(5):

(i)

in the second sentence, ‘before pricing’ shall be deemed to read ‘prior to notification under Article 27(1)’;

(ii)

‘before pricing at least in draft or initial form’ shall be deemed to read ‘prior to notification under Article 27(1)’;

(iii)

the requirement set out in the fourth sentence shall not apply;

(iv)

references to compliance with Article 7 shall be construed as if Article 7 applied to those securitisations notwithstanding Article 43(1).

[F2 4A. Subject to the second subparagraph, in paragraphs 3 and 4 a reference to a numbered Article is a reference to the Article so numbered of this Regulation as it had effect immediately before IP completion day, or as it has effect on or after IP completion day in relation to an EEA State.

In paragraphs 3(b) and 4, in relation to a STS notification made on or after IP completion day by a person who is established in the United Kingdom, a reference to Article 27(1) is a reference to that Article as it has effect on or after IP completion day in the United Kingdom.“STS notification” means notification that a securitisation meets the requirements of Section 1 or Section 2 of Chapter 4.]

5. In respect of securitisations the securities of which were issued on or after 1 January 2011 but before 1 January 2019 and in respect of securitisations the securities of which were issued before 1 January 2011 where new underlying exposures have been added or substituted after 31 December 2014, the due-diligence requirements as provided for in Regulation (EU) No 575/2013, Delegated Regulation (EU) 2015/35 and Delegated Regulation (EU) No 231/2013 respectively shall continue to apply in the version applicable on 31 December 2018.

[F3 For the purposes of this paragraph, Articles 407 and 410 of Regulation (EU) No 575/2013 (which set out, in part, requirements for due diligence) have effect with the following modifications—

(a) in Article 407 (additional risk weight) and Article 410 (uniform condition of application) a reference to Article 405 (retained interest of the issuer) is a reference to that Article as modified by [F4 paragraph 6];

(b) in Article 407, in the first subparagraph ignore the reference to Article 409; and

(c) in Article 410—

(i) ignore paragraph 1;

(ii) in paragraph 2—

(aa) in the first subparagraph read the opening words as if for “EBA shall develop draft regulatory” there were substituted “The FCA and the PRA may each make”, and ignore point (d);

(bb) ignore the second and third subparagraphs; and

(iii) in paragraph 3, —

(aa) in the first subparagraph read the opening words as if for “EBA shall develop draft regulatory” there were substituted “The FCA and the PRA may each make”;

(bb) ignore the second and third subparagraphs.]

[F5 For the purposes of this paragraph—

(a) Article 256 of Delegated Regulation (EU) 2015/35 continues to have effect notwithstanding its deletion by Article 1(7) of Commission Delegated Regulation (EU) 2018/1221; and

(b) for the purposes of the application by point (a) of paragraph 3(f) of Article 256, Article 254 continues to have effect notwithstanding its deletion by Article 1(7) of Commission Delegated Regulation (EU) 2018/1221, and has effect for those purposes with the following modifications—

(i) paragraph 1 is to be read as if for “Article 135(2)(a) of Directive 2009/138/EC” there were substituted “rule 6.1 of the Investments Part of the rulebook published by the PRA containing rules made by the PRA under the 2000 Act (as the rulebook has effect on IP completion day);

(ii) paragraph 2(b) is to be read as if for “Article 242(12)” there were substituted “ Article 242(15) ”.]

6. In respect of securitisations the securities of which were issued before 1 January 2019 [F6 a CRR firm (as defined by Article 4(1)(2A) of Regulation (EU) No 575/2013 [F7 as that Regulation had effect on IP completion day]), an insurance undertaking (as defined in section 417(1) of the 2000 Act), a reinsurance undertaking (as defined in that section) and an AIFM (as defined by regulation 4(1) of the Alternative Investment Fund Managers Regulation 2013)] shall continue to apply Article 405 of Regulation (EU) No 575/2013 and Chapters I, II and III and Article 22 of Delegated Regulation (EU) No 625/2014, Articles 254 and 255 of Delegated Regulation (EU) 2015/35 and Article 51 of Delegated Regulation (EU) No 231/2013 respectively as in the version applicable on 31 December 2018.

[F8 For the purposes of this paragraph, Article 405 of Regulation (EU) No 575/2013 has effect with the following modifications—

(a) read paragraph 2 as if—

(i) for the first subparagraph there were substituted—

“Where—

(a)

a mixed financial holding company,

(b)

a UK parent institution which is a credit institution,

(c)

a financial holding company established in the United Kingdom, or

(d)

a subsidiary of such a company or institution,

as an originator or sponsor, securitises exposures from one or more credit institutions, investment firms or other financial institutions which are included in the scope of supervision on a consolidated basis, the requirement set out in paragraph 1 may be satisfied on the basis of the consolidated situation of the mixed financial holding company, UK parent institution or financial holding company concerned.”;

(ii) in the second subparagraph for the words from “, in a timely manner” to the end there were substituted “the information needed to satisfy the requirements set out in Article 409, in a timely manner, to the originator or sponsor and, if the originator or sponsor is a subsidiary, to the mixed financial holding company, UK parent institution or financial holding company which is the parent undertaking of the subsidiary”; and

(iii) after the second subparagraph there were inserted—

“In this paragraph—

(a)

‘credit institution’, ‘financial holding company’, ‘financial institution’, ‘investment firm’, ‘subsidiary’ and ‘UK parent institution’ have the meaning given in Article 4(1) of Regulation (EU) No 575/2013; and

(b)

‘mixed financial holding company” has the meaning given in regulation 1(2) of the Financial Conglomerates and Other Financial Groups Regulations 2004.”; and

(b) in paragraph 3, in point (b) ignore “of Member States”.]

7. Until the [F9 FCA and the PRA, acting jointly, have made technical standards pursuant to Article 6(7) of this Regulation], originators, sponsors or the original lender shall, for the purposes of the obligations set out in Article 6 of this Regulation, apply Chapters I, II and III and Article 22 of Delegated Regulation (EU) No 625/2014 to securitisations the securities of which are issued on or after 1 January 2019.

8. Until the [F10 FCA and the PRA, acting jointly, have made technical standards pursuant to Article 7(3) of this Regulation], originators, sponsors and SSPEs shall, for the purposes of the obligations set out in points (a) and (e) of the first subparagraph of Article 7(1) of this Regulation, make the information referred to in Annexes I to VIII of Delegated Regulation (EU) 2015/3 available in accordance with Article 7(2) of this Regulation.

9. For the purpose of this Article, in the case of securitisations which do not involve the issuance of securities, any references to ‘securitisations the securities of which were issued’ shall be deemed to mean ‘securitisations the initial securitisation positions of which are created’, provided that this Regulation applies to any securitisations that create new securitisation positions on or after 1 January 2019.]

Textual Amendments

F1 Regulation revoked (14.12.2023 for the revocation of Art. 46) by Financial Services and Markets Act 2023 (c. 29), s. 86(3), Sch. 1 Pt. 1 (with s. 1(4)) (with savings and transitional provisions in S.I. 2024/104, regs. 52, Sch. 3); S.I. 2023/1382, reg. 2(b)(i)

F2 Art. 43(4A) inserted (31.12.2020) by The Securitisation (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/660), regs. 1(2), 30(2) (with savings in S.I. 2019/680, reg. 11) (as amended by S.I. 2020/1301, reg. 3, Sch. para. 35(e)); 2020 c. 1, Sch. 5 para. 1(1)

F3 Words in Art. 43(5) inserted (31.12.2020) by The Securitisation (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/660), regs. 1(2), 30(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F4 Words in Art. 43(5)(a) substituted (1.1.2022) by The Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021 (S.I. 2021/1376), regs. 1(3), 30(5)(a) (with regs. 36, 38)

F5 Words in Art. 43(5) inserted (31.12.2020) by The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), regs. 1(3), 32 (as amended by S.I. 2020/1301, reg. 3, Sch. para. 43(j)); 2020 c. 1, Sch. 5 para. 1(1)

F6 Words in Art. 43(6) substituted (31.12.2020) by The Securitisation (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/660), regs. 1(2), 30(4)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F7 Words in Art. 43(6) inserted (1.1.2022) by The Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021 (S.I. 2021/1376), regs. 1(3), 30(5)(b) (with regs. 37, 38)

F8 Words in Art. 43(6) inserted (31.12.2020) by The Securitisation (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/660), regs. 1(2), 30(4)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F9 Words in Art. 43(7) substituted (31.12.2020) by The Securitisation (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/660), regs. 1(2), 30(5) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F10 Words in Art. 43(8) substituted (31.12.2020) by The Securitisation (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/660), regs. 1(2), 30(6) (with savings in S.I. 2019/680, reg. 11) (as amended by S.I. 2019/1212, reg. 21); 2020 c. 1, Sch. 5 para. 1(1)