On 28 May 2021, ESMA published updates to its Questions and Answers (the “Q&A”) relating to Regulation (EU) 2017/2402 of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation (the “Securitisation Regulation”).
The following summarises ESMA’s updates and modifications to the Q&A:
How to handle character limitations in certain fields – Q5.1.27
The new question 5.1.27 tackles the practical problem in relation to character limitation in a field preventing to provide the full name and description. ESMA affirmed it will consider enabling additional characters in fields where justified. In the meantime, it is suggested:
- where the name exceeds 100 characters, to only enter the first 100 characters of the name of the entity;
- if the description of cashflow item (VSF4) exceeds 1000 characters, to provide the description of the cashflow item in the “Any other information Section” of the “Inside information or significant event report”.
Reporting of Geographic Region fields – Q5.2.1
In question 5.2.1, ESMA addressed the need for geographical region fields to be populated with information regarding the primary obligor in case of multiple obligors. ESMA emphasised that this is still the case where the main obligor is located outside EU and a secondary obligor is located inside the EU.
Obligor Basel III Segment – Arrears 1-29 Days – Q5.3.21
In question 5.3.21, ESMA readdressed the question regarding the exclusion from disclosure of fully performing loans, i.e. those with zero arrears. ESMA explained that fully performing loans shall not be included in the numerator (which is the total outstanding principal amount as at the data cut-off date of the exposures of this type and in this category of arrears), but in the denominator (which is the total outstanding principal amount of all exposures of this type).
Annexes 5 and 8: Underlying Exposures – Automobile and Leasing – year of registration – Q5.7.4
In the new question 5.7.4, ESMA explained that the first date of registration should always be provided in the case of used cars.