The purpose of the Joint Opinion is to facilitate the understanding of certain SECR provisions in cases where third-country entities become parties to a securitisation. The Joint Opinion aims to clarify the potential obligations of those third-country parties, as well as related compliance aspects of a transaction under SECR, and is intended to help improve the functioning of EU securitisation markets.
The ESAs, in their Joint Opinion, set out their common view on the practical difficulties faced by market participants in connection with the jurisdictional scope of application of various provisions in the SECR in the following four scenarios:
- securitisations where some, but not all, of their sell-side parties i.e. originator, original lender, sponsor and special purpose entity issuer etc., are located in a third country;
- securitisations where all sell-side parties are located in a third country and EU investors invest in them;
- investments in securitisations by subsidiaries of EU regulated groups, where those subsidiaries are located in a third country; and
- securitisations where one of the parties is a third country investment fund manager
The Joint Opinion recommends that these difficulties should be addressed, where possible, through interpretative guidance from the European Commission.
The ESAs also invite the European Commission to undertake a comprehensive review of the SECR jurisdictional scope framework as part of the upcoming overall reform of this Regulation, as a means of thoroughly addressing market participants’ concerns regarding proper market functioning.