The PRA and FCA are consulting on reforms to securitisation requirements.
The PRA’s consultation relates mainly to the securitisation general requirements, although some parts relate to specific capital requirements for CRR firms. The proposals follow the PRA reforms to CRR requirements intended to make prudential requirements more proportionate. They cover due diligence, risk retention, transparency and reporting, the restrictions on resecuritisations and credit-granting criteria and also include a proposal on adjustment to loss given protection in the context of the risk sensitive IRB approach to single loan mortgage securitisations.
The FCA’s consultation covers similar issues, focussing on transparency requirements and proposing to simplify and align its templates more closely with the BoE ones.
The consultations close on 18 May. HM Treasury will also consider whether any legislative changes are needed to make the changes the PRA and FCA propose,