The ECB directly supervises EU banks which are classified as “significant institutions”. There are 113 of them (here is the current list). It announced in November 2021 that it intended to start ensuring that these banks complied with the requirements for risk retention, transparency and resecuritisation under Articles 6 to 8 of the EUSR, on the basis that these were prudential matters which needed supervision.
It has now finalised its 9-page “non-binding guidance” and it applies as from 1 April, although there is a soft introduction – the “phase-in period” - lasting until 1 October. There are some differences from the text of the consultation draft but most of the pleas from industry have been ignored. The only material differences are (a) we now have this 6 month phase-in period, (b) the recommended period for notifying the ECB of new transactions has been extended from 2 weeks to 1 month and (c) the ECB has firmed up who should provide the biennial assessment (see below).
The ECB guide continues to state (as did the earlier draft) that it “does not intend to introduce any new requirements”, which may be strictly true since it is declared to be “non-binding”. However, that does seem disingenuous as regards the requirement for the reporting financial institution (a) to confirm that the information provided “reflects actual arrangements and features of the securitisation”, and (b) every two years, to provide “an assessment of how its internal policies, processes and procedures (including the level of involvement of senior management and/or the board) ensure compliance with Articles 6 to 8”. Whereas the earlier draft said that this “could” be provided by “an independent function or business, such as the internal audit and/or the compliance function”, it now says that it “should” be.
and then 