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EU Securitisation Regulation Disclosure in Times of COVID-19

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The financial markets are experiencing a significant amount of disruption for which there is no precedent. However, in these difficult times it is important that originators, sponsors and securitisation special purpose entities (SSPEs) do not lose sight of their regulatory obligations under Regulation (EU) 2017/2402 (Securitisation Regulation). This short briefing focuses on the requirement, under Article 7(1)(f) and (g) of the Securitisation Regulation, to disclose:

  • Inside information in accordance with Regulation (EU) 596/2014 (MAR).
  • Information relating to certain significant events.

The impact of the COVID-19 pandemic on existing securitisation transactions, as well as certain measures adopted to address the impact of COVID-19, may trigger the reporting obligations under Article 7(1)(f) and (g).

Failure to disclose inside information or significant events as required under the Securitisation Regulation may result in a breach of regulatory obligations and could potentially cause the relevant entities to breach representations, warranties and undertakings under the relevant transaction documentation.

Recommended action

SSPEs, originators and sponsors should carefully assess the impact of the COVID-19 pandemic on existing transactions, identify the steps taken to address such impact and consider whether any disclosure requirements under the Securitisation Regulation arise.

Particular consideration should be given to any contingency plans implemented, material breaches of obligations under the transaction documentation, including any waivers or consents required to be provided in connection therewith, and any material changes to the transaction documentation.

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Simon Porter is a member of the Firm’s Structured Capital Markets Group in the London office, where he works on a wide range of capital markets and structured finance transactions. His practice includes specialist advice to corporate trustees in capital markets transactions.

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Sarah Porter is a partner in Baker McKenzie’s Structured Finance Group in London.

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Jeremy Levy is a partner in Baker McKenzie’s Structured Capital Markets Team in London, working in the areas of securitisation, structured finance and derivatives & financial products. Jeremy joined Baker McKenzie as a trainee in 2005 and qualified into the Structured Capital Markets Team in 2007. Jeremy has been named a Next Generation Lawyer and a Next Generation Partner by the Legal 500.

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Philippe Steffens heads Baker McKenzie's Global Securitisation Practice and the Banking & Finance Practice in Amsterdam. He is a member of the European Banking & Finance Steering Committee. Philippe has been consistently recognized as a leading lawyer for securitisation and structured finance in Chambers Global, Chambers Europe, the Legal 500 and IFLR. Philippe joined the Amsterdam office as a partner in 2006. His clients are mainly financial institutions, asset managers, hedge funds and other alternative investment firms.

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Sandra Wittinghofer — a member of the Banking and Finance Group — advises national and international banks, trustees and corporations on matters of banking and finance law, particularly on structured finance and relating banking regulatory matters. She studied law in Bayreuth and Paris (Assas) and is admitted as a German Rechtsanwalt and as Solicitor (England and Wales).

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Alberto M. Fornari is a Partner in Baker McKenzie Milan office.

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