One Step Forward, Two Steps Back: Clarification to the New Reporting Requirements for European Securitisation Vehicles
By Conor Downey and Diego Shin
On 8th April 2009, Conor Downey of Paul Hastings, London attended a workshop hosted by the European Central Bank (ECB) in Frankfurt involving a variety of National Central Banks (NCBs) and representatives of the European securitisation industry to discuss the implementation of its new Regulation imposing quarterly reporting obligations on securitisation vehicles (referred to in the Regulation as Financial Vehicle Corporations (FVCs)). A detailed description of the Regulation is available on the Paul Hastings website.
A Level Playing Field?
The ECBs view at this time is that the Regulation is in its final form and no changes will be made to it. As such, the next step is for each of the Eurozone NCBs to publish their own guidelines implementing the Regulation in their respective countries.
In response to questions on this and concerns that inconsistent implementation could lead to arrangers of securitisations forum shopping for jurisdictions for their securitisations which have implemented the Regulation in the most favourable way, the ECB indicated that it expected different countries to take different approaches to implementing the Regulation and accepted that this could lead to regulatory arbitrage.