EU Final Guidelines on Simple, Transparent And Standardized Criteria for On-Balance Sheet Securitizations

The European Banking Authority has published final guidelines on the simple, transparent, and standardized criteria for on-balance-sheet securitizations. The main objective of the guidelines is to provide a single point of consistent interpretation of those criteria and ensure a common understanding of them by originators, original lenders, securitization special purpose entities, investors, competent authorities, and third-party verification agents verifying STS compliance in accordance with Article 28 of the EU Securitisation Regulation throughout the Union.

The EBA has also published amending guidelines, which make targeted amendments to the existing non-asset-backed commercial paper and asset-backed commercial paper securitisation guidelines, for a specific number of these requirements, to ensure that the interpretation provided by the EBA is consistent across all three guidelines. The guidelines will be applied on a cross-sectoral basis throughout the EU with the aim of facilitating the adoption of the STS criteria for OBS securitization, which is one of the prerequisites for the preferential risk weight treatment under the CRR, supporting further lending to the real economy and thus contributing further to the objectives of the Capital Markets Union.

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