The Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2022

PART 5 Transitional provision

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012

24.—(1) This regulation applies in relation to securitisations to which Article 43(6)(1) of the Securitisation Regulation applies where—

(a) prior to the prudential regulation changes, the requirements set out in Article 405(1) of Regulation (EU) No 575/2013 were met in the manner specified in Article 405(2) of that Regulation; and

(b) further to the prudential regulation changes, Article 405(2) of that Regulation no longer applies.

(2) The originator, sponsor or original lender must either take a net economic interest in the securitisation so that the requirements set out in Article 405(1) of Regulation (EU) No 575/2013 are satisfied or must increase any existing net economic interest in the securitisation so that those requirements are satisfied (and the provisions made by Articles 12 and 14 of the risk retention delegated regulation do not prevent any transfer of a net economic interest to the originator, sponsor or original lender for this purpose).

(3) The originator, sponsor or original lender which is to take or increase the net economic interest referred to in paragraph (2) must do so before 1st January 2023.

(4) Paragraphs (2) and (3) apply to multiple originators, multiple sponsors or multiple original lenders in accordance with Article 3 of the risk retention delegated regulation.

(5) In this regulation—

(a) references to Article 405 of Regulation (EU) No 575/2013 are references to that provision in the version applicable on 31st December 2018 as modified by points (a) and (b) of Article 43(6) of the Securitisation Regulation;

(b) references to Articles 3, 12 and 14 of the risk retention delegated regulation are to those Articles in the version applicable on 31st December 2018.

Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012

25.—(1) This regulation applies in relation to a relevant securitisation where—

(a) prior to the prudential regulation changes, the requirements set out in Article 6(1) of the Securitisation Regulation were met by the originator or sponsor in the manner specified in Article 6(4)(2) of that Regulation; and

(b) further to the prudential regulation changes, Article 6(4) of the Securitisation Regulation no longer applies.

(2) The originator, sponsor or original lender of the securitisation must either take a net economic interest in the securitisation so that the requirements set out in Article 6(1) of the Securitisation Regulation are satisfied or must increase any existing net economic interest in the securitisation so that those requirements are satisfied (and the provisions made by Articles 12 and 14 of the risk retention delegated regulation do not prevent any transfer of a net economic interest to the originator, sponsor or original lender for this purpose).

(3) The originator, sponsor or original lender which is to take or increase the net economic interest referred to in paragraph (2) must do so before 1st January 2023.

(4) Paragraphs (2) and (3) apply to multiple originators, multiple sponsors or multiple original lenders in accordance with Article 3 of the risk retention delegated regulation.

(5) In this regulation—

(a) “relevant securitisation” means a securitisation the securities of which were issued or the initial securitisation positions of which were created before 1st January 2022;

(b) a reference to the risk retention delegated regulation is a reference to that Regulation as applied to a securitisation by Article 43(7) of the Securitisation Regulation.

Interpretation of this Part

26.  In this Part—

(a) “original lender” has the meaning given in Article 2(20) of the Securitisation Regulation;

(b) “originator” has the meaning given in Article 2(3) of the Securitisation Regulation;

(c) “prudential regulation changes” has the meaning given in regulation 38(2)(b) of the Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021(3);

(d) “the risk retention delegated regulation” means Commission Delegated Regulation (EU) No 625/2014 of 13 March 2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council by way of regulatory technical standards specifying the requirements for investor, sponsor, original lender and originator institutions relating to exposures to transferred credit risk(4).

(e) “securitisation” has the meaning given in Article 2(1) of the Securitisation Regulation;

(f) “the Securitisation Regulation” means Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012;

(g) “sponsor” has the meaning given in Article 2(5) of the Securitisation Regulation.

(1)

Article 43(6) was amended by S.I. 2019/660 and 2021/1376.

(2)

Article 6(4) was amended by S.I. 2019/660 and 2021/1376.

(3)

S.I. 2021/1376.

(4)

EUR 625/2014.