On April 12th, the European Banking Authority (EBA) published its final draft regulatory technical standards (RTS), specifying the requirements for originators, sponsors and original lenders relating to risk retention. The RTS specify in greater detail the:

• Retention level measuring process;
• Requirements on the modalities of risk retention;
• Prohibition on hedging or selling the retained interest;
• Conditions for retention on a consolidated basis;
• Conditions for exempting transactions;
• Modalities of retaining risk for NPEs; and
• Impact of fee paid on the effective material net economic interest.

AIMA and ACC responded to the EBA consultation on the risk retention RTS in October 2021 and our response can be found here. The final RTS can be found here.

For further information please contact Nicholas Smith ([email protected])