The following Banking & Finance guidance note Produced in partnership with Nick Shiren of Cadwalader provides comprehensive and up to date legal information covering:
BREXIT: The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—Brexit planning and impact—financial services, Brexit—impact on finance transactions—Key issues for securitisation transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.
This Practice Note describes the position as at August 2018. Delegated legislation is being prepared under the new Securitisation Regulation—at the time of writing this was in draft form.
The risk retention requirement currently applicable in the EU consists of an obligation on an EU institutional investor to ensure that the originator, sponsor or original lender of a securitisation retains at least 5% of the net economic interest of any securitisation in which it invests. In respect of securitisations, the securities of which are issued from 1 January 2019, this indirect requirement will be supplemented by a direct obligation on one of the originator, sponsor or original lender to retain a net economic interest of at least 5%. This is explained in more detail below.
The objective of the risk retention requirement is to create an alignment of interests between those of the suppliers of a
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234