On 27 March, ESMA published a peer review in which it compares and assesses the supervisory practices of various national competent authorities (NCAs). The review focuses on the monitoring of compliance with STS criteria for true sale securitisations between January 2022 and December 2023. In accordance with its mandate, ESMA is responsible for harmonising and standardising the activities of NCAs. ESMA has selected the NCAs from Germany (BaFin), France (AMF), the Netherlands (DNB) and Portugal (CMVM) for the peer review.
The key findings of the peer review
- The peer review concludes that while DNB “fully meets expectations” in all relevant aspects and CMVM “largely meets expectations”, BaFin and AMF only “partially” meets expectations. ESMA therefore sees a need for improvement for the German and French NCAs.
- ESMA formulates “best practices” on how compliance with the STS criteria can be better monitored.
- The peer review provides insights into the activities and supervisory practices of the four NCAs in monitoring compliance with the STS criteria.
Conclusion
It is not possible to judge whether the different national supervisory practices lead to divergent results. In principle, supervisory convergence for monitoring the STS criteria in Europe seems plausible, particularly if synergies can be achieved and costs for the supervised institutions can be reduced. This topic of supervision will become even more relevant with regards to the European Commission’s upcoming legislative proposal to strengthen the securitisation markets. Among other things, it is expected that investors will be able to rely more heavily on STS verification by an independent third-party verifier. We will keep you informed.