In July, the Federal Deposit Insurance Corporation (the “FDIC”) proposed a change (discussed here and here) to certain provisions of its securitization safe harbor rule (the “Rule”) to eliminate the requirement that the securitization documents for non-grandfathered bank-sponsored securitizations not otherwise subject to Regulation AB (i.e. non-public transactions) require compliance with the disclosure and periodic reporting requirements of Regulation AB.   If adopted in its proposed form, this would significantly ease the compliance burden associated with non-public bank-sponsored ABS issuances, potentially resulting in a greater volume of such transactions.

Continue Reading Industry and advocacy groups respond to proposed changes to FDIC’s securitization safe harbor rule

The European Commission (the “Commission”) has now adopted and published the regulatory technical standards (the “RTS”) in relation to the transparency requirements under the EU Securitisation Regulation (the “Securitisation Regulation”).

The Securitisation Regulation has been applicable since 1 January 2019 to all securitisations (as defined therein) other than securitisations existing prior to that date to the extent that they are grandfathered. Article 7 of the Securitisation Regulation sets out transparency requirements (the “Article 7 Requirements”) for originators, sponsors and securitisation special purpose vehicles (“SSPEs”). In addition, Article 5 of the Securitisation Regulation requires institutional investors, other than the originator, sponsor or original lender, to verify (among other things) that the originator, sponsor or SSPE has, where applicable, made available the information required by Article 7 in accordance with the frequency and modalities set out therein.

Read the full Legal Update here.

On 22 October 2019, Mayer Brown’s supply chain and working capital finance team hosted its annual Supply Chain and Working Capital Finance seminar in London.  Now in its third year, the seminar brought together key members of Mayer Brown’s supply chain and working capital finance team from around the world as well as over 100 outside guests for a day-long programme to review recent trends and developments in the dynamic supply chain and working capital finance market.  Topics covered included an overview on receivables purchase in England, a discussion on new trends/current issues in the supply chain and working capital market in England, the U.S., Asia and other emerging markets, and a business panel to discuss insights to market development in the securitisation, receivables purchase and asset-based lending practice areas.

Slides from the programme are available here.

The London programme is one of four such programmes run by the Mayer Brown supply chain and working capital finance team around the world. Our Hong Kong and Singapore programmes were held on 3 September 2019 and 6 September 2019 respectively and our New York programme was held on 15 October 2019.

On October 15th, Mayer Brown’s supply chain finance team hosted its annual Supply Chain and Working Capital Finance seminar in New York.  Now in its fifth year, the seminar brought together key members of Mayer Brown’s supply chain team from around the world as well as over 250 outside guests for a day-long program to review recent trends and developments in the dynamic supply chain finance market.   Topics covered included risk distribution, dealing with alternative finance providers, best practices for cross-border transactions, off-balance sheet inventory finance and true sale and bankruptcy law.

Slides from the program are available here

The New York program is one of four such programs run by the supply chain finance team around the world. Our London program is being held Tuesday, October 22nd.  Programs in Singapore and Hong Kong were held in early September.

The European Banking Authority (the “EBA”) has recently launched a public consultation on its proposals to create a simple, transparent and standardised (“STS”) framework for synthetic securitisations, as set out in its Draft Report on STS Framework for Synthetic Securitisation published on 24 September 2019 (the “Discussion Paper”), which can be found here.  While the Securitisation Regulation allows traditional securitisations to benefit from preferential regulatory capital treatment if they meet the applicable STS criteria, together with some additional requirements under the Capital Requirements Regulation (as amended), synthetic securitisations are not yet able to qualify as STS.

The Discussion Paper sets out the EBA’s proposed STS criteria for synthetic securitisations.  These criteria broadly follow the existing STS criteria for non-ABCP securitisations in the Securitisation Regulation, with some amendments and some additional criteria covering matters which are specific to synthetic transactions.  STS designation would be limited to balance sheet securitisation and arbitrage securitisations would be excluded.  A separate question is whether STS synthetic securitisations will be able to benefit from preferential regulatory capital treatment as with traditional securitisations, as many market participants hope, but the Discussion Paper does not reach a conclusion on this point.

The deadline for comments on the Discussion Paper is 25 November 2019.

We will be considering this issue in more detail in future updates and will continue to monitor this closely.

The European Commission (the “Commission”) has now adopted and published the draft regulatory technical standards (the “Draft RTS”) in relation to the transparency requirements under the EU Securitisation Regulation (the “Securitisation Regulation”).  The Draft RTS are based on the draft regulatory technical standards published by the European Securities and Markets Authority on 31 January 2019 (the “ESMA Draft RTS”) and set out the information to be provided with respect to the underlying exposures in a securitisation and in the investor reports.  The related implementing technical standards (the “ITS”), which set out the reporting templates, have not yet been adopted.

Continue Reading European Commission Publishes Draft RTS for EU Securitisation Regulation’s Transparency Requirements

In a surprising development, on September 11, 2019 the Seventh Circuit Court of Appeals issued a ruling on appeal reversing a lower bankruptcy court decision and found that a UCC financing statement that contained no collateral information whatsoever, but simply cross-referenced a security agreement, sufficiently “indicated” the collateral for purposes of UCC Article 9. In so doing, it put itself directly at odds with a January 2019 decision by the U.S. Court of Appeals for the First Circuit (In re Financial Oversight & Management Board)” in connection with the insolvency proceeding for Puerto Rico.

Continue Reading Seventh Circuit issues surprising ruling on sufficiency of UCC collateral description

Please plan to join us on Tuesday, October 15, as Mayer Brown lawyers from the United States, Europe and Asia and distinguished outside panelists discuss the latest business and legal developments in the supply chain finance market.

Now in its fifth year, our New York seminar will be a full-day program. A continental breakfast and lunch will be provided.

Topics:

  • Purchasing Accounts Receivable in the United States, an Overview
  • True Sale Beyond Credit Recourse
  • Our Five Most Common Bankruptcy Questions From Clients
  • New Trends and Current Issues
  • How To: Your New 20 Jurisdiction Receivables Financing
  • Distribution Update – Current Issues in Risk Participations and Beyond
  • Business Panel: Securitization, Receivables Purchase, ABL – Which One and Why?

Download Program Agenda

CLE credit is pending.

For additional information about this program or to register, please contact Emily Sullivan at esullivan@mayerbrown.com or +1 312 701 8451.

Registration
7:30 a.m. – 9:00 a.m.

Optional Pre-session
8:00 a.m. – 9:00 a.m.

Program
9:00 a.m. – 5:20 p.m. (including networking lunch)

Reception

5:20 p.m.

Location
Mayer Brown
1221 Avenue of the Americas
New York, NY 10020
+1 212 506 2500

We continue our series on capital relief trades (CRTs) with a look at issues that arise under the Volcker Rule and U.S. risk retention rules in connection with structuring CRTs in the U.S.

Please be on the look-out for Part three of our CRT series in which Ed Parker, global practice head of Derivatives & Structured Products at Mayer Brown, and Merryn Craske, a partner in Mayer Brown’s Structured Finance Practice in London, will provide a UK perspective on CRTs, including the capital treatment and regulatory requirements for such transactions and the insurance and swap issues arising in connection with CRTs issued in the United Kingdom, as well as the European Banking Authority’s consultation paper on an STS framework for synthetic securitizations.

You can find Part two of our CRT series here.

Continue Reading Capital Relief Trades: Structuring Considerations for Synthetic Securitizations (Part two of a three part series providing a U.S. and U.K perspective)

On September 26, 2019, the US Securities and Exchange Commission extended the ability to test the waters to all issuers by adopting the highly anticipated new Rule 163B under the Securities Act of 1933 (the Securities Act). The new rule allows any issuer, or any person acting on the issuer’s behalf, to engage in test the waters communications with potential investors that are reasonably believed to be institutional accredited investors (IAIs) and qualified institutional buyers (QIBs), either prior to or following the date of filing of a registration statement relating to the offering, without violating the Securities Act’s “gun jumping” rules. Prior to Rule 163B, testing the waters was limited to emerging growth companies (EGCs) only.

Read the full Legal Update here.