What changed between the draft committee report and the plenary report

Removed:Incorporating the definition of homogeneity into the Level 1 text and deleting the EBA RTS would simplify the framework by reducing the homogeneity test to a single asset-class criterion, thereby removing unnecessary complexity and allowing similar loan types to be pooled more efficiently.

Added:‘(e) if established in a third country, the originator, sponsor or SSPE ▌ has made available at least the information listed in Article 7(1), which would have been required to be provided if those entities were established in the Union in accordance with the frequency▌provided for in that paragraph, not including the requirement to use standardised templates referred to in Article 7(4);

Removed:Regulation (EU) 2017/2402

Added:(f) if established in a third country, in the case of non-performing exposures, the originator, sponsor or original lender has applied sound standards in the selection and pricing of the exposures.’;

Removed:Article 1 – paragraph 1 – point 10 – point b a (new), Article 24 – paragraph 21: (ba) paragraph 21 is deleted;

Added:(iia) the following subparagraph is added:

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Added:‘Point (c) of the first subparagraph of this paragraph shall not apply if the securitisation position has been verified by a third-party verifier authorised and supervised in accordance with Article 28.’

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Added:(b) paragraph 3 is amended as follows:

Removed:Article 1 – paragraph 1 – point 11 – point b – point i (new), Article 26b – paragraph 8 – subparagraph 3: (b) paragraph 8 is amended as follows: / "(i) the third subparagraph is replaced by the following: / ‘The underlying exposures referred to in the first subparagraph shall have defined periodic payment streams, the instalments of which may differ in their amounts, relating to rental, principal or interest payments or to other payments, including commitment fees, received on a periodic basis, or to any other right to receive income from assets supporting such payments. The underlying exposures may also generate proceeds from the sale of any financed or leased assets.’

Added:(-i) the introductory wording is replaced by the following:

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Added:‘3. Prior to holding a securitisation position, an institutional investor, other than the originator, sponsor or original lender, shall carry out a proportionate due diligence assessment which enables it to assess the risks involved. That assessment shall consider at least all of the following:’;

Removed:Reference portfolios for synthetic on-balance-sheet securitisations of corporate loans often include undrawn or partially drawn credit facilities, generating defined periodic commitment fee payments.

Added:(i) point (b) is replaced by the following:

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Added:‘(b) all the structural features of the securitisation that can materially impact the performance of the securitisation position;’;

Removed:Article 1 – paragraph 1 – point 11 – point b – point ii (new), Article 26b – paragraph 8 – subparagraph 5: (ii) the following subparagraph is added: / For the purposes of this paragraph, underlying exposures shall be deemed to be homogeneous if they correspond to one of the following asset types: / (a) residential loans that are either secured by one or more mortgages on residential immovable property or that are fully guaranteed by an eligible protection provider among those referred to in Article 201(1) of Regulation (EU) No 575/2013 and qualifying for the credit quality step 2 or above as set out in Part Three, Title II, Chapter 2 of that Regulation; / (b) commercial loans that are secured by one or more mortgages on commercial immovable property, including offices or other commercial premises; / (c) credit facilities provided to individuals for personal, family or household consumption purposes, and credit facilities provided to enterprises where the originator applies the same credit risk assessment approach as for individuals not covered under points (a) and (b) and points (d) to (h); / (d) credit facilities, including loans and leases, provided to any type of enterprise or corporation; / (e) auto loans and leases; / (f) credit card receivables; / (g) trade receivables; / (h) other underlying exposures that are considered by the originator or sponsor to constitute a distinct asset type on the basis of internal methodologies and parameters.

Added:(ii) point (c) is deleted;

Removed:Incorporating the definition of homogeneity into the Level 1 text and deleting the EBA RTS would simplify the framework by reducing the homogeneity test to a single asset-class criterion, thereby removing unnecessary complexity and allowing similar loan types to be pooled more efficiently.

Added:(iia) the following subparagraph is added:

Removed:Regulation (EU) 2017/2402

Added:‘When considering the proportionality of the due diligence assessment under this paragraph, its appropriate scope and depth may be reduced by factors such as the credit risk and relative seniority of the securitisation position and related credit enhancement, and whether the securitisation position relates to a repeat transaction.’;

Removed:Article 1 – paragraph 1 – point 11 – point c a (new), Article 26b – paragraph 13: (ca) paragraph 13 is deleted;

Added:(c) paragraph 4 is amended as follows:

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Added:(i) in point (a), the second subparagraph is deleted;

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Added:(ia) the following point is inserted:

Removed:Article 1 – paragraph 1 – point 12 a (new), Article 26 d – paragraph 1: (12a) in Article 26d, paragraph 1 is replaced by the following: / ‘1. The originator shall make available data on static and dynamic historical default and loss performance such as delinquency and default data, or other adequate data that allow for a proper assessment of the risk, for substantially similar exposures to those being securitised, and the sources of those data and the basis for claiming similarity, to potential investors before pricing. Those data shall cover a period of at least five years.’

Added:‘(ca) in the case of repeat transactions, document the due diligence solely on the elements of the transaction that have changed since the last issuance, provided that the investor has already purchased a securitisation position in a previous transaction in the past 24 months;’;

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Added:(ib) points (d) and (e) are replaced by the following:

Removed:To meet transparency requirements, originators are required to provide data on historical default and loss performance to potential investors. In practice, it is often unclear which specific data should be disclosed. The amendment clarifies that the originator may select relevant information based on factors specific to the business and transaction, removing ambiguities and ensuring investors receive targeted and meaningful data.

Added:‘(d) ensure internal reporting to its management body or an entity designated by the management body so that the management body or an entity designated by the management body is aware of the material risks arising from the securitisation position and so that those risks are adequately managed;

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Added:(e) be able to demonstrate to its competent authorities, upon request, that it has a comprehensive and thorough understanding of the securitisation position and its underlying exposures and that it has implemented written policies and procedures for the risk management of the securitisation position proportionate to its risk profile and for maintaining records of the verifications and due diligence in accordance with paragraphs 1 and 2 and of any other relevant information;’;

Removed:Article 1 – paragraph 1 – point 13 – point c – point i, Article 26e – paragraph 8 – point aa – introductory part: (aa) a guarantee meeting the requirements set out in Part Three, Title II, Chapter 4 of Regulation (EU) No 575/2013, by which the credit risk is transferred to an insurance or reinsurance undertaking that meets all of the following criteria, at the date on which the credit protection was first recognised:

Added:(ii) the following point (g) is added:

Removed:Regulation (EU) 2017/2402

Added:‘(g) in the case of secondary market investments, document the due diligence assessment and verifications within a reasonable period of time which in any case shall not exceed 15 calendar days after the investment.’;

Removed:Article 1 – paragraph 1 – point 13 – point c – point i, Article 26e – paragraph 8 – point aa – point i: (i) the undertaking: / (1) uses an internal model approved in accordance with Articles 112 and 113 of Directive 2009/138/EC for the calculation of capital requirements for such guarantees; or / (2) has an authorisation from its designated national competent authority to underwrite the risks as set out in class 14 or class 15 of Annex I of Directive 2009/138/EC; and within such authorisation, has received from its designated national competent authority a confirmation of no objection of its underwriting guarantees for the purposes of compliance with Article 26e(8), point (aa), of this Regulation, following an assessment of its capital strength, its risk management framework, governance and underwriting policies;

Added:(iia) the following subparagraph is added:

Removed:The proposed criteria limits the eligibility solely to undertakings with an approved internal model, which would reduce the number of providers able to offer this guarantee, because the majority of European (re)insurers use the Solvency II standard formula.

Added:‘When considering the proportionality of the obligations under points (a), (b), (d) and (e) under this paragraph, an institutional investor may take into account the risk of the securitisation position and factors such as the seniority of the securitisation position and related credit enhancement and whether the securitisation position relates to a repeat transaction.’;

Removed:Regulation (EU) 2017/2402

Added:(d) the following paragraphs 4a and 4b are inserted:

Removed:Article 1 – paragraph 1 – point 13 – point c – point i, Article 26e – paragraph 8 – point aa – point ii: (ii) the undertaking complies with its Solvency Capital Requirement and its Minimum Capital Requirement referred to in Articles 100 and 128 of Directive 2009/138/EC, respectively, and has been assigned to credit quality of at least step 2 or better, at the date on which the credit protection was first recognised;

Added:‘4a. Paragraphs 1 to 4 shall not apply to institutional investors that hold a securitisation position where such securitisation position is guaranteed by a multilateral development bank listed in Article 117(2) of Regulation (EU) No 575/2013.

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Added:For the purposes of the first subparagraph, the guarantee shall meet the conditions of Article 213 and 215 of Regulation (EU) No 575/2013.

Removed:Article 1 – paragraph 1 – point 13 – point c – point i, Article 26e – paragraph 8 – point aa – point iii: (iii) the undertaking’s total non-life technical provisions, net of amounts recoverable from reinsurance contracts and special purpose vehicles, across all lines of business, within the meaning of the delegated regulation adopted pursuant to Article 86(1), point (e), of Directive 2009/138/EC, except those that contain insurance or reinsurance activity in the non-life classes of insurance of ‘credit’, ‘surety ship’ and ‘miscellaneous financial loss’, shall represent at least 40% of the total non-life technical provisions of the undertaking, net of amounts recoverable from reinsurance contracts and special purpose vehicles;

Added:4b. Paragraphs 1 and 4 shall not apply to institutional investors that hold a securitisation position where the first loss tranche representing at least 15% of the nominal value of the securitised exposures for non-STS securitisations, and at least 10% of the nominal value of the securitised exposures for STS securitisations, is either held or guaranteed by one of the entities listed under Article 6(5), points (a) to (f).

Removed:Regulation (EU) 2017/2402

Added:(e) paragraph 5 is replaced by the following:

Removed:Article 1 – paragraph 1 – point 13 – point c – point i, Article 26e – paragraph 8 – point aa – point iv: (iv) the undertaking providing the credit protection is based in the Union and at least one of the following conditions are fulfilled: / – the total assets by the insurance of reinsurance undertaking exceed EUR 5 billion; or / – where that undertaking is not part of the same group as the originator and is a subsidiary of a group subject to group supervision within the meaning of Article 213(2), point (a), (b) or (c), of Directive 2009/138/EC, the value of the total consolidated assets as stated in the latest audited financial statements of the parent undertaking of that group exceeds EUR 15 billion, and there are financial arrangements, which may include reinsurance, ancillary own funds or a combination of financial arrangements, ensuring effective financial support by the parent undertaking to the insurance or reinsurance undertaking for such guarantees, in the event that the latter is unable to provide timely compensation to the originating credit institution.

Added:‘5. Without prejudice to paragraphs 1 to 4 of this Article, where an institutional investor has delegated to another institutional investor the authority to make investment management decisions that might expose the delegating institutional investor to a securitisation, that investor may instruct the delegate to fulfil the delegating institutional investor’s obligations under this Article in respect of any exposure to a securitisation arising from those decisions. Member States shall ensure that, where a delegate is instructed under this paragraph to fulfil the obligations of the delegating institutional investor and fails to do so, any sanction under Articles 32 and 33 is imposed on the delegate and not on the delegating institutional investor that is exposed to the securitisation. Before instructing the delegate to fulfil its obligations under this Article, the delegating institutional investor shall ensure that the delegate has prior experience in conducting due diligence obligations for its own account or on account of other parties.’;

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Added:(4) Article 6 is amended as follows: