EU Transparency Report templates effective as of September 23, 2020

October 29, 2020

Corporate Trust Alert

Author(s): Erik Schneider

Trustees and Collateral Administrators should take note of these additional disclosure requirements that may impact their transactions.

Since January 1, 2019, European issuers, sponsors, and originators of CLOs and ABS and EU- regulated investors have been subject to the requirements of EU Regulation (EU) 2017/2402 (the “Securitisation Regulation”). [1] The Securitisation Regulation imposes, among other things, risk retention and disclosure requirements on EU issuers, sponsors, and originators and diligence requirements on EU investors. However, only recently, on September 23, 2020, did the detailed disclosure templates become effective. Reporting in accordance with these disclosure templates is required for a transaction to satisfy the transparency requirements of the EU Securitisation Regulation.

Article 7 of the Securitisation Regulation (the “Transparency Requirements”) obligates originators, sponsors, and issuers to make extensive information relating to the securitisation available to investors, certain governmental authorities, and, upon request, to potential investors. The Transparency Requirements impose ongoing reporting obligations, which include quarterly asset level disclosure (“Portfolio Reports”); quarterly investor reports (“Quarterly Reports”); any inside information relating to the securitisation that the reporting entity is obliged to make public under the Market Abuse Regulation (EU 596/2014) (“Inside Information”); and any significant events (“Significant Events” collectively with the Portfolio Reports, the Quarterly Reports, and any reports concerning Inside Information, the “Transparency Reports”).

The long-awaited adoption and publication by the European Parliament and Council of technical standards containing the disclosure templates that are required to be completed in preparing the Transparency Reports occurred on September 3, 2020, becoming effective on September 23, 2020. The final form of templates to be used for the Transparency Reports are contained in the annexes were published in the Official Journal of the European Union. [2]

Going forward, issuers and sponsors that are subject to the Securitisation Regulation or that intend to market to EU-regulated investors may seek assistance from trustees and collateral administrators in compiling reports that comply with these disclosure templates. Trustees and collateral administrators will want to ensure that any responsibilities concerning the collection and compilation of the detailed asset level information required for these reports, where applicable, are clearly and appropriately allocated in their deal documentation.

  1. See EU Regulation (EU) 2017/2402. [Back to reference]
  2. See Official Journal of the European Union, Volume 63 (3 September 2020). [Back to reference]

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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