Risk retention in EU securitisations
Produced in partnership with Nick Shiren of Cadwalader
Risk retention in EU securitisations

The following Banking & Finance guidance note Produced in partnership with Nick Shiren of Cadwalader provides comprehensive and up to date legal information covering:

  • Risk retention in EU securitisations
  • What is risk retention?
  • The position under the CRR
  • How has risk retention worked?
  • The Position under the Securitisation Regulation
  • Draft regulatory technical standards on the risk retention requirements

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. 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.

What is risk retention?

Risk retention in the EU

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