The European Banking Authority Publishes Draft Guidelines on STS Criteria for On-Balance-Sheet Securitisations

April 27, 2023

The European Banking Authority (“EBA”) has published a Consultation Paper on draft Guidelines on the STS criteria for on-balance-sheet securitisations (“Draft Guidelines”), comments on which are due by 7 July. Developed in accordance with a mandate set out at Article 26 of the Securitisation Regulation (Regulation (EU) 2017/2402), the Draft Guidelines are intended to provide "a single point of consistent interpretation" of the criteria on simplicity, standardisation and transparency (“STS”) as well as on the credit protection agreement, third-party verification agent and synthetic excess spread applicable to STS on-balance-sheet securitisation (“OBS”). Compliance with these criteria allows preferential risk-weighting under the amended Capital Requirements Regulation for originators retaining senior tranches in STS OBS.

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