Further to the update published on
10 March, AFME has advised the ASF that they have recently met with the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA). It would appear that these European Supervisory Authorities (ESAs) are not convinced about the urgency of this issue.
Their main argument is that due diligence requirements for investors investing in third country securitisations should have already been clear to market participants prior to the release of the Commission’s
report, through the guidance provided in the
Joint Opinion of the Joint Committee of the ESAs in March 2021 and the subsequent Joint Committee
report on Article 44 in May 2021.
On this basis, the ESAs are reluctant to give direction to National Competent Authorities in line with AFME’s
Letter dated 9 December 2022, for temporary relief to European investors from the requirements under Article 5(1)(e).
AFME has responded to this argument by email, in which AFME has explained that the abovementioned reports provide inconsistent guidance, emphasizing that the interpretation of level 1 text is far from straightforward, also referencing a broad group of industry letters and comments made over time. The ESAs have not yet responded to AFME’s email.
Read AFME's e-mail >
A further update will be provided as soon AFME receives an official response from the ESAs.