Summary of CySEC's Circular C419

Memo #61-2020

CySEC Circular No: C419
Date: 02/12/2020
Subject: Regulation (EU) No 2017/2402 on creating a single framework for simple, transparent and standarised securitisation
Purpose: To remind the Regulated Entities the main provisions of the Securitisation Regulation (EU) No. 2017/2402.

In Summary:

CySEC has issued the Circular C419 on 02/12/2020 to remind the Cyprus Investment Firms (CIFs), Alternative Investment Fund Managers (AIFMs), UCITS and UCITS management companies, Third party certification service providers and Securitisation Special Purpose Entities (SSPEs) about the main provisions of the Securitisation Regulation (EU) No. 2017/2402 (the ‘Regulation’).

Specific, this Circular C419 refers about:

A. Regulatory framework relating to STS Securitisation
B. Subject matter and scope
    The Regulation applies to all securitisations, the securities of which are issued, or securitisation positions created, after 1 January 2019.
    The Regulation lays down a general framework for the regulation of in-scope securitisation activity.
C. Selling of securitisations to retail clients
D. Key elements of the Regulation which apply to all securitisations
E. Specific key elements for simple, transparent and standardised (‘STS’) securitisation under Chapter 4 of the Regulation
F. Supervision

CySEC has been designated as the competent authority for the purpose of ensuring compliance with the Regulation for specific regulated entities.

The Regulation entered into force on 17 January 2018 and became effective from 1 January 2019, subject to some specific transitional provisions in Article 43 of the Regulation.

CySEC expects that regulated entities:

• will review their total pool of investments to determine whether they gain exposure to positions which constitute a securitization within the meaning of the Regulation. Regulated entities must make the necessary adjustments to their investment processes and policies/procedures, to ensure that the required due diligence checks and risk assessments have been complied with in accordance with the Regulation.

• must be prepared to demonstrate any such changes to their arrangements with any third parties (if applicable), investment processes and written policies and procedures, in order to be able to ensure compliance with the requirements of the Regulation.

Read the CySEC Circular C419

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