The Securitisation Regulations 2018

Document Number:2018 No. 1288
Coming into force:Coming into force on the 01/01/2019
 
FREE EXCERPT

Statutory Instruments

Financial Services And Markets

Made

3 rd December 2018

Laid before Parliament

4 th December 2018

Coming into force

1 st January 2019

The Treasury are a government department designated(1) for the purposes of section 2(2) of the European Communities Act 1972(2) in relation to financial services.

The Treasury make the following Regulations in exercise of the powers conferred by section 2(2) of the European Communities Act 1972.

PART 1 Introductory provisions

Citation and commencement

  1. These Regulations may be cited as the Securitisation Regulations 2018 and come into force on 1 st January 2019.

    Interpretation

  2. —(1) In these Regulations—

    “the Act” means the Financial Services and Markets Act 2000(3);

    “appropriate regulator” means:

    the FCA in the case of:

    a contravention of a relevant requirement by any person for which it is the competent authority under these Regulations or under the EU Securitisation Regulation 2017(4); or

    a contravention by any person of a relevant requirement imposed by the FCA on that person under these Regulations;

    the PRA in the case of:

    a contravention of a relevant requirement by any person for which it is the competent authority under these Regulations or under the EU Securitisation Regulation 2017; or

    a contravention by any person of a relevant requirement imposed by the PRA on that person under these Regulations;

    “authorised person” has the meaning given in section 31(2) (authorised persons) of the Act;

    “established in the United Kingdom” means constituted under the law of a part of the United Kingdom with a head office, and if there is a registered office, that office, in the United Kingdom and where at least part of the securitisation business of the person so constituted is carried on in the United Kingdom;

    “the EU Securitisation Regulation 2017” means Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012;

    “the FCA” means the Financial Conduct Authority;

    “FCA-authorised person” means an authorised person who is not a PRA-authorised person;

    “original lender” has the meaning given in Article 2(20) of the EU Securitisation Regulation 2017;

    “originator” has the meaning given in Article 2(3) of the EU Securitisation Regulation 2017;

    “the PRA” means the Prudential Regulation Authority;

    “PRA-authorised person” has the meaning given in section 2 B(5)(5) (the PRA’s general objective) of the Act ;

    “the register” is the register of third party verifiers provided for in regulation 18 of these Regulations;

    “relevant requirement” means a requirement imposed by or under these Regulations, by or under the Act as applied by these Regulations or by or under the EU Securitisation Regulation 2017;

    “securitisation business” means activities in relation to a securitisation as defined in Article 2(1) of the EU Securitisation Regulation 2017 , when carried out as a regular occupation or business activity;

    “SRUP” or “securitisation regulation unauthorised person” is a person who is not an authorised person and is:

    an original lender;

    an originator;

    a person established in the United Kingdom who establishes a SSPE in a third country;

    a person engaged in the conduct of selling a securitisation position, within the meaning given in Article 2(19) of the EU Securitisation Regulation 2017 , to a retail client located in the United Kingdom;

    a sponsor;

    a SSPE; or

    a third party verifier;

    “securitisation special purpose entity” or “SSPE” has the meaning given in Article 2(2) of the EU Securitisation Regulation 2017;

    “sponsor” has the meaning given in Article 2(5) of the EU Securitisation Regulation 2017;

    “STS” has the meaning given in Article 18 of the EU Securitisation Regulation 2017;

    “third party verification service” means the service described in Article 27(2) of the EU Securitisation Regulation 2017;

    “third party verifier” means a third party authorised by the FCA as provided in Article 28 of the EU Securitisation Regulation 2017;

    “the Tribunal” means the Upper Tribunal.

    (2) Except as provided by paragraph (1)—

    (a) any expression used in these Regulations which is defined for the purposes of the EU Securitisation Regulation 2017 has the meaning which it has in the EU Securitisation Regulation 2017; and

    (b) any other expression used in these Regulations which is defined for the purposes of the Act has the meaning given by the Act.

    Directly applicable EU regulations

  3. In these Regulations a reference to an Article of the EU Securitisation Regulation 2017 includes a reference to any directly applicable EU regulation made under that Article.

    Designation of competent authorities

  4. —(1) Subject to paragraph (2) , the FCA is designated as the competent authority responsible for—

    (a) the supervision of compliance of persons engaged in the conduct of selling a securitisation position to a retail client located in the United Kingdom with obligations set out in Article 3 of the EU Securitisation Regulation 2017;

    (b) the supervision of compliance of persons established in the United Kingdom with the obligations set out in Article 4 of the EU Securitisation Regulation 2017 when establishing SSPEs in a third country;

    (c) the supervision of compliance of originators, original lenders and SSPEs established in the United Kingdom and not covered by the European Union legislative acts referred to in paragraph 3 of Article 29 of the EU Securitisation Regulation 2017 with the obligations set out in Articles 6 , 7 , 8 and 9 of the EU Securitisation Regulation 2017;

    (d) the supervision of compliance of originators, sponsors and SSPEs established in the United Kingdom with the obligations set out in Articles 18 to 27 of the EU Securitisation Regulation 2017 and the supervision of compliance of originators and sponsors established in the United Kingdom with the obligation set out in the last sentence of paragraph 6 of Article 29 of the EU Securitisation Regulation 2017; and

    (e) the authorisation of third party verifiers established in the United Kingdom provided for in Article 28 of the EU Securitisation Regulation 2017 and the supervision of their compliance with the obligations set out in that Article.

    (2) The PRA is designated as the competent authority responsible for the supervision of compliance by PRA-authorised persons established in the United Kingdom and not covered by the European Union legislative acts referred to in Article 29(3) of the EU Securitisation Regulation 2017 with the obligations set out in Articles 6 , 7 , 8 and 9 of the EU Securitisation Regulation 2017.

    PART 2 Disciplinary measures and procedures

    Temporary prohibition relating to management functions

  5. —(1) If the appropriate regulator considers that an individual has contravened or has been knowingly concerned in the contravention of a relevant requirement, the appropriate regulator may impose a temporary prohibition on that individual from holding an office or position involving responsibility for taking decisions about the management of an originator, sponsor or SSPE.

    (2) A temporary prohibition imposed under paragraph (1) expires at the end of such period as the appropriate regulator may specify, but the imposition of a temporary prohibition does not affect the appropriate regulator’s power to impose a further temporary prohibition under paragraph (1).

    (3) A temporary prohibition under paragraph (1) may relate to the management of—

    (a) a named originator, sponsor or SSPE;

    (b) an originator, sponsor or SSPE of a specified description; or

    (c) any originator, sponsor or SSPE.

    (4) The appropriate regulator may revoke a temporary prohibition imposed by it under this regulation, or vary it so as to reduce the period for which it has effect.

    Temporary prohibition relating to management functions: obligations on originator, sponsor or SSPE

  6. —(1) An originator, sponsor or SSPE must take reasonable care to ensure that no individual holds an office or position involving responsibility for taking decisions about the management of that entity in contravention of a temporary prohibition imposed under regulation 5(1).

    (2) Except in the cases given in paragraph (3) , if an originator, sponsor or SSPE fails to comply with paragraph (1) , it is taken to have contravened a requirement imposed by the FCA under these Regulations. If an originator, sponsor or SSPE fails to comply with paragraph (1) and—

    (a) it is a PRA authorised person or a SRUP; and

    (b) the temporary prohibition has been imposed by the PRA;

    the originator, sponsor or SSPE is taken to have contravened a requirement imposed by the PRA under these Regulations.

    Public censure

  7. —(1) If the appropriate regulator considers that—

    (a) a SRUP has contravened a relevant requirement;

    (b) a member of the management body of a SRUP was knowingly concerned in the contravention by the SRUP of a relevant requirement; or

    (c) another member of the senior management of a SRUP was knowingly concerned in the contravention by the SRUP of a relevant requirement;

    the appropriate regulator may publish a statement to that effect.

    (2) If the appropriate regulator considers that an individual on whom a temporary prohibition has been imposed under regulation 5 has breached the prohibition, the appropriate regulator may publish a statement to that effect.

    Financial penalties

  8. —(1) If the appropriate regulator considers that—

    (a) a SRUP has contravened a relevant requirement;

    (b) a member of the management body of a SRUP was knowingly concerned in the contravention by the SRUP of a relevant requirement; or

    (c) another member of the senior management of a SRUP was knowingly concerned in the contravention by the SRUP of a relevant requirement;

    the appropriate regulator may impose a penalty of such...

To continue reading

REQUEST YOUR TRIAL