Frankfurt am Main at night, Germany

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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