The difficulty with this is that to be a CRR Investment Firm, a portfolio manager must be MiFID-regulated and authorised to conduct certain regulated activities which include holding of client money or provision of custody services and/or dealing on own account, underwriting financial instruments or placing on a firm commitment basis. While acknowledging this will exclude some managers, the EBA remains of the view that to extend this definition through the Technical Standards would cut across the language in CRR itself. ![]() Is there any relaxation of the requirements for sponsors holding the retention which may make it easier for CLO managers to comply?Īs we discussed in our briefing on the Consultation Draft in May 2013, the CRR amends the definition of a "sponsor" so that a sponsor no longer has to be a credit institution but can be an investment firm as long as it has certain MiFID authorisations (a CRR Investment Firm). The Technical Standards confirmed that, in accordance with the CRR, the retaining entity must be an originator, sponsor or original lender. Have there been any changes since the Consultation Draft regarding who can hold the retention in a CLO? When CRR came into force, Articles 404-410 replaced Article 122a of the existing Capital Requirements Directive, and the CEBS Guidelines fell away, along with the related Q&As issued by CEBS in September 2011. The Technical Standards will be binding in all EU Member States, unlike the preceding Guidelines on Article 122a of the existing Capital Requirements Directive issued by CEBS in December 2010 (CEBS Guidelines), and cannot be disapplied or varied by home regulators. What is the effect of the Technical Standards on existing guidelines? If there is no such objection, they will be published in the Official Journal and come into force 20 days later. The Technical Standards are now subject to a period during which the European Parliament or the Council may object to their content. The Regulatory Technical Standards have been approved by the European Commission with little substantive change from the EBA's draft. ![]() The Technical Standards follow the publication of a draft version (the Consultation Draft) in May of 2013. On 17 December 2013, the European Banking Authority (EBA) published its Final Draft Regulatory Technical Standards and Implementing Technical Standards (together, Technical Standards) in respect of Article 404-410 of the Capital Requirements Regulation (CRR) (formerly Article 122a). Restructuring, Special Situations and Insolvency.Antitrust, Regulation and Foreign Investment.
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