Sector developments and company hires

RFC issued on synthetic STS criteria
The EBA has launched a public consultation on its draft guidelines on the criteria related to simplicity, standardisation and transparency and additional specific criteria for on-balance sheet securitisations. The aim is to ensure a harmonised interpretation of STS criteria, in alignment with the EBA guidelines for traditional securitisations.

With the introduction of STS criteria for synthetic securitisations, on-balance sheet securitisations are eligible for preferential risk-weight treatment under the CRR. The draft guidelines clarify aspects with a potential level of ambiguity, thus both ensuring a harmonised understanding of the criteria, but also a harmonised implementation in terms of capital requirements.

During the development of the guidelines, the EBA says it has been mindful to ensure consistency with existing guidelines for traditional securitisations, which has provided a single point of consistent interpretation of the STS criteria to the relevant stakeholders throughout the EU. For a limited number of these criteria, the guidelines for non-ABCP and ABCP securitisation have been updated to ensure further clarity and to reflect the practical implementation of the criteria.

Responses to the consultation are invited by 7 July and a public hearing will take place on 30 May.