On 10 June 2020, the High Level Forum on the Capital Market Union (CMU) published its final report setting out the next steps in the EU CMU action plan. One of the proposed legislative fixes (page 64) is clarification on Article 5(1)(e) of the European Securitisation Regulation; that it should not apply to third country securitisations and therefore the disclosure and reporting requirements should not apply.
Instead, it is recommended that a third country (non-EU) originator should ensure that an EU regulated investor has received sufficient information to meet the requirements for due diligence, under Article 5, proportionate to the risk profile of the securitisation exposure. Although the recommendation of the High Level Forum does carry some weight, it does not amount to a regulatory guidance and is not binding on the European Commission. It is now open to the Commission to release the relevant regulatory guidance on third country securitisations.
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