Regulatory Technical Standards on Risk Retention Adopted with No Significant Changes by European Parliament

June 16, 2014

The European Parliament has adopted Commission Delegated Regulation (EU) No 625/2014 of 13 March 2014, relating to Articles 404-410 of the Capital Requirements Regulation (CRR), previously Article 122a of the Capital Requirements Directive. The adopted regulatory technical standards (RTS) can be found here.

The RTS was published in the Official Journal on Friday 13 June 2014 and comes into force on 3 July 2014 (20 days after publication in the Official Journal). The RTS brings into force the provisions of the final draft regulatory technical standards published by the European Commission on 13 March 2014 (Final Draft RTS), which specify the requirements for investor, sponsor, original lenders and originator institutions relating to exposures to transferred credit risk under Articles 404-410 of the CRR.

The RTS adopt the provisions of the Final Draft RTS without any substantive amendments. For a summary of the changes made by the Final Draft RTS from the previous draft issued by the European Banking Authority, please refer to our previous OnPoint.

Investors in securitisations subject to the Capital Requirements Regulation should review the RTS carefully to ensure that they understand their due diligence and monitoring obligations prior to becoming exposed to a securitisation.