CEBS Guidelines on the application of article 122a of the CRD

status: Final and translated into the EU official languages

These Guidelines set out the provisions for the application of Article 122a of the Capital Requirements Directive (CRD). In particular, They give guidance on the implementation of the retention clause by the originator, the sponsor or original lender and on the due diligence and risk management practices credit institutions are asked to carry out when investing in securitisation positions. Article 122a provides new requirements to be fulfilled by credit institutions when acting in a particular capacity, such as originator or sponsor, and also when investing in securitisations.

These guidelines remain relevant in respect of a competent authority's decision when assessing: i) whether an additional risk weight should be applied in cases where there is a material breach of Articles 405, 406, or 409 CRR by reason of the negligence or omission of an institution and where the respective securitisation position is part of a transaction issued on or after 1 January 2011 and before 1 January 2014, and, ii) how to interpret substitution of exposures for transactions before 1 January 2011 as referred in Article 404 CRR.

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