[author: Sejal Patel]

On December 4, the Securitization Regulations 2018 (SI 2018/1288) were published on legislation.gov.uk, together with an explanatory memorandum. A link to the Securitization Regulations 2018 can be found here and a link to the explanatory memorandum can be found here.

The Regulations reflect the application of the Securitization Regulation ((EU) 2017/2402)) in the UK. The Securitization Regulation harmonizes and reforms existing rules on due diligence, risk retention, disclosure and credit-granting that will apply in a uniform way to all securitizations, securitizing entities and all types of EU regulated institutional investors. It also creates a new framework for simple, transparent and standardized long-term securitizations and asset-backed commercial paper programs.

Among other things, the Regulations designate the FCA and PRA as the competent authorities in relation to the Securitization Regulation and require the FCA to maintain and update a register of all persons it has authorized as third-party verification agents. They also amend the Financial Services and Markets Act 2000 (“FSMA“), and other UK legislation, to create the new supervisory, investigative and sanctioning powers required by the Securitization Regulation and ensure UK legislation is compatible with the Securitization Regulation.

The Regulations will come into force on January 1, 2019.