NETHERLANDS Law and Practice Contributed by: Mandeep Lotay and Dámaris Engelschman, Freshfields LLP
ritisation Regulation has been applied, in accordance with Article 6 of the EU Securitisation Regulation.
institutions and investment firms are assigned a more favourable risk weight than positions held by credit institutions and investment firms in tra - ditional securitisations. Whether a transaction qualifies as an STS non- ABCP traditional securitisation depends on whether the requirements covered by Section 1 of Chapter 4 of the EU Securitisation Regulation have been met, while the requirements set out in Section 2 of Chapter 4 of the EU Securitisa - tion Regulation determine whether a transaction qualifies as an STS ABCP securitisation. 4.7 Use of Derivatives Derivatives are governed by Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, cen - tral counterparties and trade repositories (EMIR). EMIR applies not only to financial counterparties but also to non-financial counterparties (eg, a securitisation SPV). Furthermore, EMIR includes provisions on the central clearing of OTC deriva - tives as well as on obligations to post collateral. Dutch securitisation transactions often include hedging arrangements between the issuer SPV and a hedge counterparty, which seek to address mismatches between interest rates under the underlying receivables and interest rates under the notes issued by the issuer SPV. 4.8 Investor Protection The EU Securitisation Regulation has multiple pillars in terms of investor protection, as follows: • Article 7 of the EU Securitisation Regulation, as discussed under 4.2 General Disclosure Laws or Regulations and under 4.4 Periodic Reporting , sets forth transparency require - ments which seek to protect investors as well as potential investors;
4.5 Activities of Rating Agencies Credit rating agencies are subject to regula - tory oversight pursuant to Regulation (EU) No 462/2013 of the European Parliament and of the Council of 21 May 2013 amending Regulation (EC) No 1060/2009 on credit rating agencies (“CRA III Regulation”). According to the CRA III Regulation, credit rating agencies are required to obtain registration with the European Securi - ties and Markets Authority (ESMA). The CRA III Regulation also mandates ESMA with the super - vision of the activities of credit rating agencies within the EU. 4.6 Treatment of Securitisation in Financial Entities Entities supervised under Directive 2013/36/EU of the European Parliament and of the Coun - cil of 26 June 2013 on access to the activity of credit institutions and the prudential supervi - sion of credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/ EC and 2006/49/EC (CRD V) are subject to capital adequacy rules pursuant to Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on pru - dential requirements for credit institutions and amending Regulation (EU) No 648/2012 (CRR III). Accordingly, such entities will be required to maintain a certain amount of regulatory capital over their risk-weighted assets. CRR III sets out the parameters for calculating the risk weight that can be attached to a securitisation position. In this regard, it is important to note that CRR III differentiates between positions in traditional securitisations and positions in STS (“Simple, Transparent and Standardised”) securitisations, as positions in STS securitisations held by credit
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