Securitisation Regulation: "One Step Forward….?"

How will the European Commission's latest legislative proposal affect European and U.S. transactions?

Broadly, the proposed reduction in reporting requirements will be welcome, especially for transactions classified as "private securitisations" (although the detail of such changes will not be available for some time). However, for U.S. transactions, there is some disappointment that the proposal reiterates the requirement that EU investors verify full compliance with the reporting requirements under Article 7 of the EUSR and increases the penalties on such investors for negligent or intentional non-compliance. The proposed changes to the regulatory capital treatment of securitisations which have been released concurrently with the legislative proposal also fall short of market expectations.