The new RTS on homogeneity was published in the official journal of the European Union on 15 February and will therefore enter into force on 6 March 2024. In addition to non-ABCP and ABCP transactions, the RTS now also includes synthetic on-balance-sheet transactions.
In terms of content, the RTS is similar to the final draft published by the EBA on 14 February 2023. The homogeneity requirements therefore remain largely unchanged compared to the current RTS. The new RTS only applies to transactions that are implemented from 6 March 2024.
Probably the most discussed topic will continue to be the differentiation with regard to the homogeneity factor “type of obligor” for corporate loans: A distinction can still be made only between SMEs and any other companies, which is particularly unfortunate for synthetic transactions. In its final draft, EBA clarified that the distinction can be made based on internal classification procedures. Although this clarification is not included in the final RTS, it remains in place according to the EBA. As this is a frequently discussed topic among the transaction parties in the STS process, we believe that it would have made sense to include it in the Level II text, but the possibility of differentiating by internal procedures definitely makes it easier for banks to fulfil the homogeneity criterion.
Overall, the RTS leads to consistent regulations in the market due to the few changes and the validity for all transaction types. The full grandfathering for existing transactions is also to be welcomed.