Response to consultation on RTS on risk retention

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Question 1: Do you have any general comments on the draft technical standards?

We are missing a specification in respect of the definition of originator. To our knowledge it was intended to add a specification defining which entity should be qualified as originator under Regulation (EU) [XXX/201X]. Furthermore, it would be very helpful if EBA could add a clarification on the interaction between the qualification as originator in Regulation (EU) No 575/2013 and the qualification as originator under Regulation (EU) [XXX/201X].

Question 2: Considering the mandate granted to ESMA in Article [7(3)] of the STS Regulation, do you believe that these technical standards should include disclosure-related provisions relevant to risk retention and, if so, do you agree with the scope of the obligations set out in the draft technical standards?

We do not see any need for including such disclosure provisions into the draft technical standards as such disclosure is already market practice.

Question 3: Do you believe that the provisions in Article 11 of the draft technical standards (relating to the measurement of retention for the undrawn amounts in exposures in the form of credit facilities) are needed?

Yes, they are helpful for clarification purposes.

Question 4: Do you consider the provisions of Article 12(3) of the draft technical standards to be useful and how would you see such a transaction working in practice, including following a default by the retainer under the secured funding arrangements?

Yes, they are indeed useful. In particular, Article 12(3) of the draft technical standards is relevant for any collateral in connection with central bank financing or repo transactions. Once the retainer defaults under the secured funding transaction, the counterparty would probably enforce on the collateral by either collecting interest or redemption from the retained securitization positions or selling them into the market. So, the effect would probably be identical to what an insolvency administrator would do if the retainer became insolvent.

Question 5: Do you believe that the provisions of Article 16 of the draft technical standards relations to assets transferred to the SSPE are adequate?

Not relevant for auto ABS.

Question 6: Do you consider that the provisions of Article 17 of the draft technical standards relating to a change of retainer are adequate?

Yes, they are.

Question 7: Should the draft technical standards contain any additional guidance on the operation of Article 14 of Regulation (EU) No 575/2013?

No, we do not consider it necessary.

Question 8: Do you consider that wording similar to that which is set out in Article 5(1)(a) of Commission Delegated Regulation (EU) No 625/2014 relating to revolving securitisations should be maintained in these technical standards?

No, because the scope of application of the wording which is set out in Article 5(1)(a) of Commission Delegated Regulation (EU) No 625/2014 relating to revolving securitisations was already not clear and therefore impractical.

Question 9: Do you consider that guidance is required on what constitutes a significantly lower performance for the purposes of Article [6(2)] of the STS Regulation and, if so, what would you propose?

In our opinion it would be very difficult to give guidance on what constitutes a significantly lower performance. Such guidance would have to be given for each class of assets. Furthermore, such guidance would have to take into account that even the assets in one class of assets could be different as each portfolio is a unique composition of assets. If such guidance would not take into account these factors it would be impractical and causing difficulties in terms of interpretation.

Name of organisation

Verband der Automobilindustrie e.V.; Banken der Automobilwirtschaft; CCFA