Sts Reporting Requirements

The final step in the labelling process is to inform regulators of the STS designation. The STS labelling process requires payers, sponsors and SPEs to notify their supervisor and ESMA in accordance with a required template, after which ESMA shall publish the STS notification in a register on its website. There is an optional procedure where authorized third parties can confirm that the eligibility criteria are met. Where this option is used, the notification shall include a statement that the STS criteria have been verified by that third party. However, third-party certification does not exempt initiators, sponsors and SPVs from liability for STS claims that prove to be false. In addition, the certificate submitted by the third party is a one-time assessment; Therefore, they will not offer ongoing monitoring. Originators, promoters and SPVs shall take responsibility for informing their regulator and ESMA when a transaction is no longer eligible for the STS. ESMA is currently considering draft technical standards specifying the procedural, formal and substantive requirements for an STS notification. The STS notification must contain a brief explanation or justification of why the transaction meets STS criteria. This obligation is proportionate because some criteria require more detailed explanations than others. The notification procedure may also include a cross-reference to the prospectus (if applicable). The aim is to avoid duplication of the notification form with the prospectus.

In practice, however, this will be an additional administrative step in the notification procedure. Do I need to record the hearing loss if I want to test the employee`s hearing again? No, if you retest the employee`s hearing within 30 days of the first test and the new test does not confirm the writable STS, you do not need to record the hearing loss in the OSHA 300 log. If the repeated test confirms the writable STS, you must record the hearing loss within seven (7) calendar days of the new test. If subsequent audiometric tests performed in accordance with the testing requirements of the noise standard § 1910.95 show that an STS is not persistent, you can remove or hide the recorded entry. Article 27 of the EU Securitisation Regulation requires the originator and the sponsor to inform ESMA and its competent authority without undue delay if a securitisation no longer complies with the applicable STS requirements. The AMF noted that two of the five ISPs had determined that some of their transactions were no longer STS compliant due to Brexit, the absence of SSPE or the end of the transaction. Differences were found between the ISPs that had taken steps to monitor and remove the STS label, and two of the ISPs did not have such agreements. Once all other requirements have been met, the HPR requires that the total value of all underlying exposures to a single debtor at the time of exposure does not exceed two percent of the total value of all exposures in the underlying pool. For these purposes, loans and leases to a group of related debtors are considered to be a single debtor. For CAAP programs, the same limit applies to the concentration of borrowers at the program level, that is: at the time the underlying assets are included in the program. However, the concentration limit does not apply to trade receivables under an ABCP programme where the credit risk is covered by eligible credit guarantees. ESMA`s projects relate to the implementation of the Regulation and therefore cover the requirements for third-party verification, STS reporting by the originator, sponsor or securitisation entity and the implementation of the transparency requirements set out in the Securitisation Regulation: Since the introduction of credit level data requirements by the ECB in 2013, the European Data Warehouse (EDWH) operates its platform, through which originators can provide (potential) investors and all other interested market participants with individual contractual data from portfolios of securitised exposures in a clearly defined scope and format.

The new Securitisation Regulation adopts this principle and extends it to other information areas (e.g. standardised investor reporting format, insider reporting) and requires full reporting via a “securitisation register” for STS-compliant public transactions. On 17 January 2018, two EU regulations entered into force, establishing a new framework for European securitisations. Regulation (EU) 2017/2402 (Securitisation Regulation) consolidates the patchwork of European securitisation legislation and introduces a new framework for simple, transparent and standardised securitisations (STS). Regulation (EU) 2017/2401 (Securitisation Supervision Regulation, SPR)) replaces certain provisions of the Capital Requirements Regulation (CRR) and sets out the framework within which certain institutional investors (e.g. banks and investment firms) can potentially benefit from more favourable capital regulatory treatment for STS securitisation risks. Although the legislation applies to securitisations entered into after 1 January 2019, pending securitisations of legacy securitisations may use the STS designation, provided that the transaction and the underlying assets comply with the procedural and structural requirements at the time of notification to the European Securities and Markets Authority (ESMA) and that the other requirements are met at the time of issuance (e.g. risk maintenance and lending criteria). If a securitisation transaction receives the STS label, no preferential capital treatment is guaranteed.

In addition, not all types of investors will be eligible for preferential capital treatment for eligible transactions. The SPR, which focuses on credit institutions and investment firms regulated by the CRR, does not grant the same STS capital relief to other institutional investors such as pension funds, insurance and reinsurance companies. Although the European Commission has made encouraging statements regarding the extension of STS capital relief to insurers, the impact of the new STS framework could be mitigated if insurers are effectively excluded from preferential capital treatment. Carrying out the STS capital treatment for securitisations is therefore a multi-step process – transactions that meet the STS eligibility criteria of the Securitisation Regulation must pass additional tests in the SPR. Below, we have outlined some practical steps to follow in STS analysis. However, this guide is not intended to replace sound legal advice, as eligibility criteria must be applied and processes must be conducted individually for each transaction. Although investment institutions have some flexibility as regards the risk-weighting methodology they use to determine their overall regulatory capital requirements, the SEC-SA method is only available to determine whether a securitisation position qualifies for more favourable STS treatment. For example, positions in a CAAP program or transaction are only eligible for STS treatment if the underlying exposures meet an SEC-SA risk weight of 75% or less at the time of inclusion in ABCP (taking into account credit risk mitigation).