Legal provisions of COM(2018)339 - Sovereign bond-backed securities - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)339 - Sovereign bond-backed securities. |
|---|---|
| document | COM(2018)339  |
| date | May 24, 2018 |
Chapter 1
Subject matter, scope and definitions
Article 1
Subject
matter
This Regulation lays down a general framework for sovereign bond-backed securities (‘SBBSs’).
Article 2
Scope
This Regulation applies to original purchasers, special purpose entities, investors and any other entity involved in the issuance or holding of SBBSs.
Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of
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Article 3
Definitions
For the purposes of this Regulation, the following definitions shall apply:
(1) ‘competent authority’ means a public authority or a body officially recognised by national law that is empowered by national or Union law to perform the tasks set out in this Regulation;
(2) ‘sovereign bond’ means any debt instrument issued by the central government of a Member State that is denominated and funded in the domestic currency of that Member State and has an original maturity of one year or more;
(3) ‘sovereign bond-backed security’ or ‘SBBS’ means a financial instrument denominated in euro whose credit risk is associated with the exposures to a portfolio of sovereign bonds and that complies with this Regulation;
(4) ‘special purpose entity’ or ‘SPE’ means a legal person, other than the original purchaser, that issues SBBSs and carries out the activities in relation to the underlying portfolio of sovereign bonds in accordance with Articles 7 and 8 of this Regulation;
(5) ‘original purchaser’ means a legal person that purchases sovereign bonds on its own account and subsequently transfers those sovereign bonds to an SPE for the purpose of issuing SBBSs;
(6) ‘investor’ means a natural or legal person that holds an SBBS;
(7) ‘tranche’ means a contractually established segment of the credit risk associated with the SBBSs' underlying portfolio of sovereign bonds and that bears a risk of greater or smaller credit loss than a position of the same amount in another segment of that credit risk;
(8) ‘senior tranche’ means the tranche within an SBBSs issue that bears losses after all the subordinated tranches of that SBBS issue have done so;
(9) ‘subordinated tranche’ means any tranche within an SBBSs issue bearing losses before the senior tranche;
(10) ‘junior tranche’ means the tranche within an SBBSs issue bearing losses before any other tranche..
Chapter 2
Composition, maturity and structure of SBBSs
Article 4
Composition of the underlying portfolio
1. The underlying portfolio of an SBBS issue shall only consist of the following:
(a) sovereign bonds of Member States whose currency is the euro;
(b) the proceeds from the redemption of those sovereign bonds.
2. The weight of sovereign bonds of every Member State within an SBBSs' underlying portfolio (‘baseline weight’) shall be equal to the relative weight of the contribution
to the European Central Bank (ECB) by that Member State in accordance with the key for subscription, by the national central banks of Members States, of the ECB's paid-in capital as laid down in Article 29 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union.
SPEs may however deviate from the nominal value of sovereign bonds of each Member State, as given by the application of the baseline weight, by maximum five percent.
3. Sovereign bonds of a Member State shall be excluded from the SBBSs’ underlying portfolio where the Commission has adopted an implementing act establishing that any of the following situations exist:
(a) over the previous twelve months (‘period of reference’), the Member State has issued less than half of the amount of sovereign bonds resulting from its relative weight determined in accordance with paragraph 1, multiplied by the aggregate amount of SBBSs issued in the twelve months prior to the period of reference;
(b) over the previous twelve months, the Member State has financed at least half of its annual funding requirements through official financial assistance in support of the implementation of a macroeconomic adjustment programme as specified in Article 7 of Regulation (EU) No 472/2013 of the European Parliament and of the Council21.
Where the first subparagraph applies, SPEs shall determine the baseline weights of sovereign bonds of the remaining Member States by excluding the sovereign bonds of the Member referred to in the first subparagraph and applying the calculation method of paragraph 1.
4. ESMA shall monitor and assess whether the situation referred to in points (a) or (b) of paragraph 3 exist or has ceased to exist and inform the Commission thereof.
5. The Commission may adopt an implementing act establishing that the situation referred to in points (a) or (b) of paragraph 3 exist or has ceased to exist. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 26(2).
Article 5
Maturity of the underlying assets
1. SBBSs tranches that are part of the same issue shall have a single original maturity
date. That maturity date shall be equal to or up to one day longer than the remaining maturity of the sovereign bond with the longest remaining maturity within the underlying portfolio.
Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability (OJ L 140, 27.5.2013, p.
21
2. The remaining maturity of any sovereign bond in an SBBSs' underlying portfolio
shall not be shorter than six months than the remaining maturity of the sovereign bond with the longest remaining maturity in that portfolio.
Article 6
Structure of the tranches, payment and losses
1. An SBBSs issue shall be composed of one senior tranche and one or more subordinated tranches. The outstanding nominal value of the senior tranche shall be seventy percent of the outstanding nominal value of the entire SBBSs issue. The number and the outstanding nominal values of the subordinated tranches shall be determined by the SPE, subject to the limitation that the nominal value of the junior tranche shall be at least two percent of the outstanding nominal value of the entire SBBSs issue.
2. Where adverse developments severely disrupt the functioning of sovereign debt markets in a Member State or in the Union, and where that disruption has been confirmed by the Commission in accordance with paragraph 4, SPEs shall lower the outstanding nominal value of the senior tranche to sixty percent for any SBBSs issue issued after that confirmation.
Where the Commission, in accordance with paragraph 4, has confirmed that that disruption has ceased to exist, paragraph 1 will apply to all SBBSs issues issued after that confirmation.
3. ESMA shall monitor and assess whether the situation referred to in paragraph 2 exists or has ceased to exist and inform the Commission thereof.
4. The Commission may adopt an implementing act establishing that the disruption referred to in paragraph 2 exists or has ceased to exist. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 26(2).
5. Payments under an SBBS shall be dependent upon the payments of the underlying portfolio of sovereign bonds.
6. The distribution of losses and the order of payments shall be determined by the tranche of the SBBSs issue and shall be fixed for the entire life cycle of the SBBSs issue.
Losses shall be recognised and assigned as they materialise.
Article 7
Issuance of SBBSs and obligations of SPEs
1. SPEs shall comply with all of the following requirements:
(a) they are established in the Union;
(b) their activities are limited to issuing and servicing SBBSs issues and managing the underlying portfolio of those SBBSs issues in accordance with Articles 4, 5, 6 and 8;
(c) SPEs are solely responsible for the provision of services and activities referred to in point (b).
2. SPEs shall have full ownership of the underlying portfolio of an SBBSs issue.
The underlying portfolio of an SBBSs issue shall constitute a security financial collateral arrangement as defined in Article 2(c) of Directive 2002/47/EC of the European Parliament and of the Council22 securing the financial obligations of the SPE towards investors in that SBBSs issue.
Holding an SBBS of a specific SBBS issue shall not provide for any rights or claims on the assets of that SPE issuing the SBBSs issue that go beyond the underlying portfolio of that isse and the income generated from holding that SBBS.
Any reduction in the value or proceeds of the underlying portfolio of sovereign bonds shall not give rise to a liability claim from investors.
3. An SPE shall keep records and accounts so that it:
(a) segregates its own assets and financial resources from those of the underlying portfolio of the SBBSs issue and the related proceeds;
(b) segregates the underlying portfolios and proceeds of different SBBSs issues;
(c) segregates the positions held by different investors or intermediaries;
(d) verifies that at any point in time the number of SBBSs of one issue is equal to the sum of the SBBSs held by all investors or intermediaries in that issue;
(e) verifies that the outstanding nominal value of the SBBSs of one issue is equal to the outstanding nominal value of the underlying portfolio of sovereign bonds of that issue.
4. SPEs shall hold the sovereign bonds referred to in Article 4(1)(a) in custody, as permitted under point (1) of Section B of Annex I to Directive 2014/65/EU of the European Parliament and of the Council23 and point (2) of Section A of the Annex to Regulation (EU) No 909/2014 of the European Parliament and of the Council24 only at central banks, central securities depositories, authorised credit institutions or authorised investment firms.
Article 8
Investment policy
1. An SPE shall invest payments of principal or interest from the sovereign bonds
referred to in Article 4(1)(a) that are due prior to payments of principal or interest under the SBBS only in cash, or in highly liquid financial instruments denominated in euro with low market and credit risk. Those investments shall be eligible for liquidation within one day with minimal adverse price effect.
22
23
Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial
collateral arrangements (OJ L 168, 27.6.2002, p. 43).
Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in
financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173,
12.6.2014, p. 349).
Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on
improving securities settlement in the European Union and on central securities depositories and
amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257,
24
An SPE shall hold in custody, as permitted under point (1) of Section B of Annex I to Directive 2014/65/EU and point (2) of Section A of the Annex to Regulation (EU) No 909/2014, the payments referred to in the first subparagraph only at central banks, central securities depositories, authorised credit institutions or authorised investment firms.
2. An SPE shall not change the underlying portfolio of an SBBS until the maturity of that SBBS.
3. ESMA shall develop draft regulatory technical standards further specifying the financial instruments that can be considered to be highly liquid with minimal market and credit risk as referred to in paragraph 1. ESMA shall submit those draft regulatory technical standards to the Commission by [6 months from the date of entry into force of this Regulation].
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.
Chapter 3
Use of the designation SBBS and notification, transparency and
information requirements
Article 9
Use of the designation Sovereign Bond-Backed Securities
The designation ‘Sovereign Bond-Backed Security’ or ‘SBBS’ shall only be used for financial products that comply with both of the following conditions:
(a) the financial product complies on an ongoing basis with Articles 4, 5 and 6;
(b) ESMA has been notified of that financial product in accordance with Article 10(1) and the financial product has been included in the list referred to in Article 10(2).
Article 10
SBBS notification requirements
1. An SPE shall notify ESMA at least one week before issuance of an SBBSs issue by means of the template referred to in paragraph 5 of this Article that an SBBSs issue meets the requirements of Articles 4, 5 and 6. ESMA shall inform the SPE's competent authority thereof without undue delay.
2. ESMA shall maintain on its official website a list of all SBBSs issues that have been notified by SPEs. ESMA shall update that list instantly and remove any SBBSs issue that is no longer considered to be an SBBSs issue following a decision of competent authorities in accordance with Article 15.
3. A competent authority that has imposed remedial measures or administrative sanctions as referred to in Article 15 shall immediately notify ESMA thereof. ESMA shall immediately indicate on the list referred to in paragraph 2 of this Article that a
competent authority has imposed administrative sanctions for which there is no longer a right of appeal, in relation to the SBBS concerned.
4. ESMA shall develop draft regulatory technical standards specifying the information referred to in paragraph 1.
ESMA shall submit those draft regulatory technical standards to the Commission by [6 months from the date of entry into force of this Regulation].
Power is conferred on the Commission to adopt the regulatory technical standards referred to in this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
5. ESMA shall develop draft implementing technical standards to establish the templates to be used for the provision of the information referred to in paragraph 1.
ESMA shall submit those draft implementing technical standards to the Commission by [6 months from the date of entry into force of this Regulation].
Power is conferred on the Commission to adopt the implementing technical standards referred to in this paragraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Article 11
Transparency requirements
1. An SPE shall, without undue delay, provide investors and competent authorities with the following information:
(a) information on the underlying portfolio that is essential for assessing whether the financial product complies with Articles 4, 5 and 6;
(b) a detailed description of the priority of payments of the tranches of the SBBSs issue;
(c) where no prospectus has been drawn up in the cases set out in Articles 1(4), 1(5) or 3(2) of Regulation (EU) No 2017/1129 of the European Parliament and of the Council25, an overview of the main features of the SBBS, including, where applicable, details regarding the exposure characteristics, the cash flows and loss waterfall;
(d) the notification referred to in Article 10(1).
The information referred to in point (a) of this paragraph shall be made available at the latest one month after the due date for the payment of interest of the SBBS.
2. An SPE shall make the information referred to in paragraph 1 available on a website that:
(a) has a well-functioning data quality control system;
(b) is subject to appropriate governance standards and is maintained and operated in accordance with an organisational structure that ensures the continuity and orderly functioning of the website;
Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a
25
(c) (d) (e)
is subject to systems, controls and procedures that identify all relevant sources of operational risk;
includes systems that ensure the protection and integrity of the information received and the prompt recording of that information;
makes it possible to keep records of the information for at least five years after the maturity date of every SBBSs issue.
Information referred to in paragraph 1 and the location where the information is made available shall be indicated by the SPE in the documentation regarding the SBBSs provided to investors.
Article 12
Information requirements
1. Before transferring an SBBS, the transferor shall provide to the transferee all the following information:
(a) the procedure to allocate proceeds from the underlying portfolio of sovereign bonds to the different tranches of the SBBSs issue, including following or in anticipation of a non-payment on the underlying assets;
(b) how voting rights on an exchange offer following or in anticipation of a non-payment on any sovereign bonds in the underlying portfolio shall be assigned to investors and how any losses from a debt non-payment shall be allocated across the different tranches of the SBBSs issue.
2. ESMA shall develop draft regulatory technical standards to specify the information referred to in paragraph 1.
ESMA shall submit those draft regulatory technical standards to the Commission by [6 months from the date of entry into force of this Regulation].
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.
Chapter 4 Product oversight
Article 13
Supervision
1. Member States shall designate one or more competent authorities to supervise the
compliance of SPEs with this Regulation. Member States shall inform the Commission and ESMA about those competent authorities and, where relevant, about how their functions and duties are divided.
The competent authority of the Member State of where the SPE is established shall supervise compliance with the requirements laid down in this Regulation.
2. Member States shall ensure that competent authorities have the supervisory, investigatory and sanctioning powers to fulfil their duties under this Regulation.
They shall have the power to, at least:
(a) request access to any documents in any form to the extent that they relate to SBBSs, and to receive or take a copy thereof;
(b) require the SPE to provide information without delay;
(c) require information from any person related to the activities of the SPE;
(d) carry out on-site inspections with or without prior announcement;
(e) take appropriate measures to ensure that an SPE continues to comply with this Regulation;
(f) issue an order to ensure that an SPE complies with this Regulation and desists from a repetition of any conduct that breaches this Regulation.
3. ESMA shall publish and keep up-to-date on its website a list of competent authorities.
Article 14
Cooperation between competent authorities and ESMA
1. Competent authorities and ESMA shall cooperate closely and exchange information to carry out their duties. In particular, they shall closely coordinate their supervision to identify and remedy infringements of this Regulation, develop and promote best practices, facilitate collaboration, foster consistency of interpretation and provide cross-jurisdictional assessments in the event of any disagreements.
To facilitate the use of powers of competent authorities and ensure the consistent application and enforcement of the obligations set out in this Regulation, ESMA shall act within the powers set out in Regulation (EU) No 1095/2010.
2. A competent authority that has clear and demonstrable grounds that an SPE is in breach of this Regulation shall promptly inform in a detailed manner the competent authority of the Member State where the SPE is established. The competent authority of the Member State where the SPE is established shall take appropriate measures, including the decision referred to in Article 15.
3. Where the SPE persists in acting in a manner that is clearly in breach of this Regulation despite measures taken by the competent authority of the Member State where it is established, or because that competent authority has failed to take measures within a reasonable time, the competent authority that has detected a breach of this Regulation may, after informing the competent authority of the Member State where the SPE is established and ESMA, take all appropriate measures to protect investors, including prohibiting the SPE from carrying out any further marketing of SBBSs within its territory and taking the decision referred to in Article 15.
Article 15
Misuse of the SBBS designation
1. Where there are reasons to believe that an SPE in infringement of Article 9 has used the designation ‘SBBS’ to market a product that fails to comply with the requirements set out in that Article, the competent authority of the Member State where the SPE is established shall follow the procedure provided for in paragraph 2.
2. Within 15 days after becoming aware of the possible infringement referred to in paragraph 1 the competent authority of the Member State where the SPE suspected of the infringement is established shall decide whether Article 9 has been infringed and shall notify ESMA and the other relevant competent authorities thereof, including the competent authorities of the investors, when known. A competent authority that disagrees with the decision taken shall notify all other relevant competent authorities about its disagreement without undue delay. Where that disagreement is not resolved within three months of the date on which all relevant competent authorities have been notified, the matter shall be referred to ESMA in accordance with Article 19 and, where applicable, Article 20 of Regulation (EU) No 1095/2010. The conciliation period referred to in Article 19(2) of Regulation (EU) No 1095/2010 shall be one month.
Where the competent authorities concerned fail to reach an agreement within the conciliation phase referred to in the first subparagraph, ESMA shall take the decision referred to in Article 19(3) of Regulation (EU) No 1095/2010 within one month. During the procedure set out in this paragraph, an SBBS appearing on the list maintained by ESMA pursuant to Article 10(2) shall continue to be considered a SBBS and shall be kept on that list.
Where the relevant competent authorities agree that the infringement by the SPE is related to non-compliance with Article 9 in good faith, they may decide to grant the SPE a period of maximum three months to remedy the identified infringement, starting from the day the SPE was informed of the infringement by the competent authority. During that period, an SBBS appearing on the list maintained by ESMA pursuant to Article 10(2) shall continue to be considered an SBBS and shall be kept on that list.
3. ESMA shall develop draft regulatory technical standards to specify the cooperation obligations and the information to be exchanged under paragraph 1 and 2.
ESMA shall submit those draft regulatory technical standards to the Commission by [6 months from the date of entry into force of this Regulation].
Power is delegated to the Commission to adopt the regulatory technical standards referred to in this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
Article 16
Remedial
measures and administrative sanctions
1. Without prejudice to the right for Member States to lay down criminal sanctions
pursuant to Article 17, competent authorities shall impose on the SPE or the natural person managing the SPE the appropriate remedial measures, including the decision referred to in Article 15, and the appropriate administrative sanctions set out in paragraph 3 where SPEs:
(a) have failed to comply with the obligations set out in Articles 7 and 8;
2.
3.
(b)
(c)
The
(a)
(b)
(c)
(d)
(e)
have failed to meet the requirements of Article 9, including where they have not notified ESMA in accordance with Article 10(1), or have made a misleading notification;
have failed to meet the transparency requirements of Article 11.
administrative sanctions referred to in paragraph 1 shall be at least the following:
a public statement indicating the identity of the natural or legal person having committed the infringement and the nature of the infringement;
an order requiring the natural or legal person that committed the infringement to cease the conduct and to desist from a repetition of that conduct;
a temporary ban preventing any member of the SPE's management body or any other natural person held responsible for the infringement from exercising management functions in SPEs;
in case of an infringement as referred to in point (b) of paragraph 1, a temporary ban on the SPE from making a notification as referred to in Article 10(1);
an administrative pecuniary sanctions of maximum EUR 5 000 000, or in Member States the currency of which is not the euro, the corresponding value in the national currency on [the date of entry into force of this Regulation], or of maximum 10 % of the total annual net turnover of the SPE, as established in the most recent available accounts approved by the management body of the
SPE;
(f)
an administrative pecuniary sanctions of maximum twice the amount of the benefit derived from the infringement where that benefit can be determined, even where that benefit exceeds the maximum amounts referred to in point (e).
Competent authorities, when determining the type and level of administrative sanctions, shall take into account the extent to which the infringement was intentional or results from negligence and all other relevant circumstances, including, where appropriate:
(a) (b)
(c) (d)
(e) (f)
(g)
the materiality, gravity and the duration of the infringement;
the degree of responsibility of the natural or legal person responsible for the infringement;
the financial strength of the responsible natural or legal person;
the importance of profits gained or losses avoided by the responsible natural or legal person, insofar as those profits or losses can be determined;
the losses for third parties caused by the infringement;
the level of cooperation of the responsible natural or legal person with the competent authority;
4.
previous infringements by the responsible natural or legal person.
Member States shall ensure that any decision imposing the remedial measures or administrative sanctions is properly reasoned and is subject to a right of appeal.
Article 17
Interaction with criminal sanctions
Member States that have laid down criminal sanctions for the infringement referred to in Article 16(1) shall give their competent authorities all the necessary powers to liaise with judicial, prosecuting, or criminal justice authorities within their jurisdiction to receive from, and to provide to, other competent authorities and ESMA specific information about criminal investigations or proceedings commenced for the infringements referred to in Article 16(1).
Article 18
Publication of administrative sanctions
1. Competent authorities shall publish on their website any decision imposing an administrative sanction in respect of which there is no longer a right of appeal and which is imposed for an infringement as referred to in Article 16(1) without undue delay and after the person concerned has been informed.
The publication referred to in subparagraph 1 shall include information on the type and nature of the infringement, the identity of the natural or legal person on whom the administrative sanction has been imposed.
2. Competent authorities shall publish the administrative sanction on an anonymous basis, in accordance with national law, in any of the following circumstances:
(a) where the administrative sanction is imposed on a natural person and, following an prior assessment, publication of personal data is found to be disproportionate;
(b) where publication would jeopardise the stability of financial markets or an ongoing criminal investigation;
(c) where publication would cause disproportionate damage to the SPE or natural persons involved.
Alternatively, where the circumstances referred to in the first subparagraph are likely to cease within a reasonable period of time, publication under paragraph 1 may be postponed for such a period of time.
3. Competent authorities shall ensure that information published under paragraph 1 or 2 remains on their official website for five years. Personal data shall be retained on the official website of the competent authority only for the period necessary.
Article 19
Macroprudential oversight of the SBBSs market
Within the limits of its mandate laid down in Regulation (EU) No 1092/2010 of the European Parliament and of the Council26, the ESRB shall be responsible for the macroprudential
Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European
26
oversight of the Union’s SBBSs market and act in accordance with the powers set out in that Regulation.
Article 20
Member States notifications
Member States shall notify the laws, regulations and administrative provisions referred to in Articles 13 and 16 to the Commission and ESMA by [one year from the date of entry into force of this Regulation]. Member States shall notify the Commission and ESMA of any subsequent amendments thereto without undue delay.
Chapter 4 Implementing powers and final provisions
Article 21
Amendment to Directive 2009/65/EC
In Directive 2009/65/EC the following Article 54a is inserted:
“Article 54a
1. Where Member States apply a derogation as referred to in Article 54 or grant a waiver as referred to in Article 56(3), the competent authorities of the UCITS home Member State shall:
(a) apply the same derogation or grant the same waiver for UCITS to invest up to 100% of their assets in SBBSs as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted] in accordance with the principle of risk-spreading where those competent authorities consider that unit-holders in the UCITS have a protection that is equivalent to that of unit-holders in UCITS complying with the limits laid down in Article 52;
(b) shall waive the application of paragraphs 1 and 2 of Article 56.
2. By [6 months from date of entry into force of SBBS Regulation ], Member States shall adopt, publish and communicate to the Commission and ESMA measures necessary to comply with paragraph 1.”.
Article 22
Amendment to Directive 2009/138/EC
In Article 104 of Directive 2009/138/EC, the following paragraph 8 is added:
"8. For the purposes of the calculation of the Basic Solvency Capital Requirement, exposures to sovereign bond-backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted]
shall be treated as exposures to Member States' central governments or central banks denominated and funded in their domestic currency.
By [6 months from date of entry into force of SBBS Regulation], Member States shall adopt, publish and communicate to the Commission and ESMA measures necessary to comply with the first subparagraph.”.
Article 23
Amendments to Regulation EU No 575/2013
Regulation (EU) No 575/2013 is amended as follows:
(1) in Article 268 , the following paragraph 5 is added:
"5. By way of derogation from the first paragraph, sovereign bond-backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted] may always be treated in accordance with the first paragraph of this Article.";
(2) in Article 325, the following paragraph 4 is added:
"4. For the purpose of this Title, institutions shall treat exposures in the form of sovereign bond-backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted] as exposures to the central government of a Member State.";
(3) in Article 390(7), the following subparagraph is added:
“The first subparagraph shall apply to exposures to sovereign bond-backed securities as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted].”.
Article 24
Amendment to Directive (EU) 2016/2341
In Directive (EU) 2016/2341, the following Article 18a is inserted:
“Article 18a
Sovereign-Bond Backed Securities
1. In their national rules regarding the valuation of assets of IORPs, the calculation of own funds of IORPs, and the calculation of a solvency margin for IORPs, Member States shall treat sovereign-bond backed securities, as defined in Article 3(3) of Regulation [reference of the SBBS Regulation to be inserted], in the same way as euro area sovereign debt instruments.
2. By [6 months from date of entry into force of the SBBS Regulation], Member States shall adopt, publish and communicate to the Commission and ESMA measures necessary to comply with paragraph 1.”.
Article 25
Evaluation clause
No sooner than five years after the date of entry into force of this Regulation and once sufficient data have become available, the Commission shall carry out an evaluation of this Regulation assessing whether it has achieved its objectives to eliminate undue regulatory hindrances to the emergence of SBBSs.
Article 26
Committee procedure
1. The Commission shall be assisted by the European Securities Committee established by Commission Decision 2001/528/EC27. That Committee shall be a committee within the meaning of Regulation (EU) No 182/2011.
2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.
Article 27
Entry into force
This Regulation shall enter into force the 20th day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.