Good News for Securitisation: European Commission asks ESMA to consider expanding the use of the “No Data” option in Disclosure Templates

December 19, 2018

Late on Tuesday evening, 18 December 2018, the EU Commission posted online its letter to the European Securities and Markets Authority (ESMA) on the data disclosure proposals contained in the regulatory technical standards (RTS) issued by ESMA on 22 August 2018.  

The draft RTS specifies the information and details of a securitisation be made available by the originator, sponsor or securitisation special purpose vehicle entities (SSPE) and to implementing standards with regard to the format and standardised templates for making this information available.  

In the letter, the Commission indicated that it intends to endorse the draft RTS once certain amendments are undertaken. Recognising that an overly strict disclosure regime may result in disruption to the securitisation market, the Commission requested that ESMA consider whether the “no data” option could be used for additional fields in the draft templates. 

The “no data” option allows the originator, sponsor or SSPE to indicate that no data is available for certain required fields when in fact information is not available. In some cases, and especially when assets are acquired in the secondary market or otherwise (including CLOs, ABCP and NPLs), a full set of data may not be available for all the underlying assets. The flexibility to indicate to investors when specific information is not available would allow the securitisation market to function in a normal manner and not be obligated to reject assets because specific fields in the templates cannot be completed.  

The strict approach to the use of “no data” options for the templates was one of the industry’s key concerns with the templates, and the Commission’s letter to ESMA will hopefully lead to a more practical approach to using the “no data” option. 

Other areas of concern raised by the industry, including the applicability of the disclosure requirements to private transactions, were not addressed in the Commission’s letter.  

If you have any questions or comments, please contact the following Dechert partners: 

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