Impact Of The Securitisation Regulation On UCITS Funds

Introduction

On 17 January 2018 the new Securitisation Regulation (Regulation EU 2017/2402) (the "Securitisation Regulation") came into force and will apply from 1 January 2019. The Securitisation Regulation represents a long-awaited reform of the EU securitisation rules which will replace the existing patchwork of sector specific legislation governing European securitisations with harmonised rules on due diligence, risk retention and transparency applying to all securitisations.

Over the last number of years, there has been an emerging trend from investment managers focussed on credit seeking exposure to securitisations located in the US, Cayman Islands and Europe with underlying credit exposure to European and US assets through UCITS. Such securitisations are typically structured as collateralised loan obligations (colloquially referred to as "CLOs"), collateralised debt obligations or collateralised mortgage applications. The introduction of the Securitisation