Diverging Paths: EU-Niversal And UK Due Diligence Requirements For Securitisations

The European Commission published a report on the functioning of the EU securitisation regulation on 10 October 2022 (the SECR Report) which provides that EU institutional investors are required to obtain full Article 7 information in relation to third-party securitisations. This de facto excludes EU institutional investors from investing in most third-country securitisations because they are not able to obtain all of the relevant information from third-country originators, sponsors or SSPEs, including information that is required to be provided using the ESMA reporting templates. In response, a number of industry bodies representing the securitisation industry, including AFME, AIMA and ICMA, wrote to the Joint Committee of the European Supervisory Authorities (the ESAs) on 9 December 2022 to propose that the ESAs issue guidance to enforce Article 5(1)(e) in a proportionate and risk-based manner which would allow local regulators to consider the type and extent of the