On 7 July 2023, the European Commission adopted and published the final text of the Regulatory Technical Standards (the “RTS”) specifying risk retention requirements for originators, sponsors and original lenders pursuant to Article 6(7) of Regulation (EU) 2017/2402 (the “EU Securitisation Regulation”). The Commission-adopted text will now be reviewed by the European Parliament and Council and, if endorsed by both bodies without objection, the RTS in its current form will be published in the Official Journal of the European Union and gain full legal effect, possibly as early as September 2023.
The RTS’ entry into force is eagerly anticipated. The European Banking Authority (the “EBA”) originally proposed the draft RTS in July 2018 (the “2018 Draft RTS”), the provisions of which were embraced by market participants at the time in advance of enactment. Nearly three years later, a revised draft of the RTS was published in June 2021 and the EBA launched a public consultation process (the "Consultation“) in respect of the proposed amendments to the 2018 Draft RTS, the results of which were published in April 2022 along with further revised draft RTS (the “2022 Draft RTS”).
