Regulation 2021/557 - Amendment of Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation to help the recovery from the COVID-19 crisis - Main contents
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Regulation (EU) 2021/557 of the European Parliament and of the Council of 31 March 2021 amending Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation to help the recovery from the COVID-19 crisis| Legal instrument | Regulation |
|---|---|
| Number legal act | Regulation 2021/557 |
| Original proposal | COM(2020)282  |
| CELEX number i | 32021R0557 |
| Document | 31-03-2021; Date of signature |
|---|---|
| Publication in Official Journal | 06-04-2021; OJ L 116 p. 1-24 |
| Signature | 31-03-2021 |
| Effect | 09-04-2021; Entry into force Date pub. +3 See Art 2 |
| End of validity | 31-12-9999 |
6.4.2021 |
EN |
Official Journal of the European Union |
L 116/1 |
REGULATION (EU) 2021/557 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 31 March 2021
amending Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation to help the recovery from the COVID-19 crisis
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Central Bank (1),
Having regard to the opinion of the European Economic and Social Committee (2),
Acting in accordance with the ordinary legislative procedure (3),
Whereas:
(1) |
The COVID-19 crisis is severely affecting people, companies, health systems and the economies of Member States. In its Communication of 27 May 2020 entitled ‘Europe's Moment: Repair and Prepare for the Next Generation’, the Commission stressed that liquidity and access to finance will continue to be a challenge in the months to come. It is therefore crucial to support the recovery from the severe economic shock caused by the COVID-19 pandemic by introducing targeted amendments to existing pieces of financial legislation. |
(2) |
The severe economic shock caused by the COVID-19 pandemic and the exceptional containment measures required are having a far-reaching impact on the economy. Businesses are facing disruption to supply chains, temporary closures and reduced demand, while households are confronted with unemployment and a fall in income. Public authorities at Union and Member State level have taken far-reaching action to support households and solvent undertakings in withstanding the severe but temporary slowdown in economic activity and the resulting liquidity shortages. |
(3) |
It is important that credit institutions and investment firms (institutions) employ their capital where it is most needed and the Union regulatory framework facilitates their doing so while ensuring that institutions act prudently. In addition to the flexibility provided for by the existing rules, targeted changes to Regulation (EU) 2017/2402 of the European Parliament and of the Council (4) would ensure that the Union securitisation framework provides for an additional tool to foster economic recovery in the aftermath of the COVID-19 crisis. |
(4) |
The extraordinary circumstances of the COVID-19 crisis and the unprecedented magnitude of the attendant challenges triggered a call for immediate action to ensure that institutions have the ability to channel sufficient funds to businesses, so as to help them absorb the economic shock caused by the COVID-19 pandemic. |
(5) |
The COVID-19 crisis risks increasing the number of non-performing exposures (NPEs), and increases the need for institutions to manage and deal with their NPEs. One way for institutions to do so is to trade their NPEs on the market through securitisation. Additionally, in the current context, it is vital that risks are moved away from the systemically important parts of the financial system and that lenders strengthen their capital positions. Synthetic securitisation is one way of achieving this, as well as, for example, raising new own funds. |
(6) |
Securitisation special purpose entities (SSPEs) should only be established in third countries that are not listed by the Union (5) on the EU list of non-cooperative jurisdictions for tax purposes, and updates thereto (Annex I), or in the list of high-risk third countries which have strategic deficiencies in their regimes on anti-money laundering and... |
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