NORWAY Law and Practice Contributed by: Markus Nilssen, Vanessa Kalvenes and Marcus Cordero-Moss, BAHR
reporting obligation on the servicer of the secu - ritised portfolio. The transparency requirements under the Secu - ritisation Regulation include periodic reporting obligations. Pursuant to Article 7, the respon - sible entity in a securitisation transaction shall make quarterly investor reports available, or, in the case of asset-backed commercial paper, monthly investor reports. 4.5 Activities of Rating Agencies The activities of rating agencies are regulated in Regulation (EC) 1060/2009, as amended, (the “CRA Regulation”) which provides the regulatory framework for credit rating agencies and which is incorporated by reference in Norwegian law. Among other things, credit rating agencies are required to be registered and supervised, and are required to use rating methodologies that are rigorous, systematic, continuous and sub - ject to validation based on historical experience, including back-testing. Notably, Article 8c in the CRA Regulation requires the issuer in securitisation transactions to obtain a double credit rating, issued by two different credit rating agencies. Further, the issuer should consider appointing at least one credit rating agency which does not have more than 10% of the total market share. ESMA is responsible for registration and super - vision of credit rating agencies in the EU. In Norway, the Financial Supervisory Authority of Norway (FSAN) is the competent authority under the CRA Regulation. 4.6 Treatment of Securitisation in Financial Entities Norwegian credit institutions and investment firms are subject to the regulatory capital
requirements under Regulation (EU) 575/2013 (the “Capital Requirements Regulation” or CRR). The CRR has been amended by the so-called “banking package” consisting of Regulation (EU) 2019/876 (CRR2), Directive (EU) 2019/878 (CRD V) and Directive (EU) 2019/879 (BRRD II), and more recently the “Basel IV package” consisting of Regulation (EU) 2+24/1623 (CRR3) and Direc - tive (EU) 2024/1619 (CRD VI) which apply in the EU as of 1 January 2025. Norwegian legislation implementing the “bank - ing package” entered into force in June 2022. It is expected that CRR3 will be implemented in Norway within the first half of 2025, with CRD VI to follow shortly thereafter. Under the CRR, the originator may exclude the underlying exposures in a securitisation from the calculation of its risk-weighted exposure amounts and expected loss amounts if: • significant credit risk associated with the securitised exposures is considered to have been transferred to third parties (significant risk transfer or SRT); or • the originator institution applies a 1.250% risk weight to all securitisation positions it holds in the securitisation or deducts these securitisa - tion positions from its Common Equity Tier 1 items. If any of these requirements are met, credit insti - tutions and investment firms will only be required to hold regulatory capital for the securitisation positions they retain in the transaction. The retained securitisation positions receive risk- weights which are calculated under the applica - ble approach set out in the CRR. As competent authority under the CRR, the FSAN may decide on a case-by-case basis that
319 CHAMBERS.COM
Powered by FlippingBook