EBA Risk Retention Report And Recommendations Released

The turn of every year since 2010¹ has seen new developments in European risk retention regulation and 2014 is no exception; year-end brought a double-helping of this annual bonanza, with new developments in both the United States and in Europe.

In the United States, the six federal agencies² published their joint final rule to implement the credit risk retention requirement of section 15G of the Securities Exchange Act of 1934 on 24 December 2014³. These U.S. risk retention rules will formally take effect from 24 December 2015 for RMBS and from 24 December 2016 for other types of securitisation transactions.

In Europe, risk retention rules have applied since 1 January 2011. On 22 December 2014,as mandated by legislation and at the further request of the European Commission, the European Banking Authority (the "EBA") published its report and opinion on the application and effectiveness of the European risk retention rules implemented by the EU