The European Commission has recently issued a supplementary regulation relating to regulatory technical standards on disclosure requirements for structured finance instruments. The disclosure requirements cover structured finance instruments issued, or are outstanding, on or after 1 January 2017 and apply to issuers, originators and sponsors established in the European Union from that date.
The European Securities and Markets Authority will issue further guidance and technical reporting instructions before 1 January 2017 to enable issuers, originators and sponsors to develop adequate systems and procedures to adhere to these disclosure requirements.
The disclosure requirements do not create additional disclosure or reporting requirements for the underlying borrowers or obligors. Information on the underlying borrowers or obligors will continue to be provided by the relevant borrowers or obligors to the issuers, originators and sponsors directly or indirectly under relevant disclosure and information undertakings, such as those that appear under Loan Market Association finance documents.
The obligation to comply with the disclosure requirements is the joint responsibility of the relevant issuers, originators and sponsors. The reporting entities are required to provide information on a quarterly basis using disclosure templates set out in the supplementary regulation, which includes reporting on:
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loan-level information;
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prospectuses;
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asset sale agreements;
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servicing, administration and cash management agreements;
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trust deeds, agency agreements and framework agreements;
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intercreditor documents;
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hedging agreements;
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deal structures;
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asset characteristics;
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cash flow; and
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note holder and secured creditor rights,
relating to the relevant structured finance instruments.
Further information as to what information is required to be disclosed from 2017 onwards can be found in this copy of the relevant regulation.
