Securitisation: Commission Approves Risk Retention RTS

The European Commission finally adopted the regulatory technical standards on risk retention (the Risk Retention RTS) under the EU Securitisation Regulation on 7 July 2023.

These will now be scrutinised by the EU Council and the European Parliament before they are published in the Official Journal (publication is expected in Q4 2023 or in Q1 2024). Until the Risk Retention RTS come into force, the existing CRR RTS (Commission Delegated Regulation (EU) No 625/2014) continue to apply.

This brings the market closer to a conclusion on the longest-running deliverable under the EU Securitisation Regulation. The EBA first published draft risk retention RTS in 2018, but these had not been finalised by 2021 when the 2021 amendments to the EU Securitisation Regulation under the Capital Markets Recovery Package (among other matters) brought risk retention in securitisations of non-performing exposures (NPEs) and the impact of fees paid to the retainer on the effective