European Central Bank (ECB) Banking Supervision published a guide describing how significant institutions should notify the ECB when they seek supervisory recognition of significant risk transfer (SRT) in securitisations and when they undertake transactions that could constitute implicit support. It replaces the ECB’s 2016 public guidance and is recommended for all SRT securitisations issued after publication, including cases where a non-euro area originator’s euro area parent intends to recognise the capital reduction at consolidated level. For SRT under Articles 244 and 245 of the Capital Requirements Regulation, the guide sets out a regular notification route that typically takes around three months and a new fast-track route for simpler, more standardised test-based transactions, with feedback targeted within eight working days. Fast-track eligibility is framed by quantitative and structural constraints, including a portfolio size cap of EUR 8 billion, a Common Equity Tier 1 ratio impact at origination capped at 25 basis points, minimum granularity thresholds and exclusions for features such as ramp-up periods, certain amortisation structures, high bullet-loan shares, leveraged-exposure concentrations, close links with investors, non-standard early termination clauses and synthetic excess spread. Permission-based transactions still require an ECB decision before any capital reduction can be recognised. Institutions are expected to notify the regular route at least three months before expected closing and provide an updated “freeze period” package ideally one month before closing, while fast-track users should inform the ECB at least one month in advance and submit the template-based notification no later than ten working days before closing, with final documentation due within one month after origination. Where a fast-track notification does not meet the criteria or template tests, the ECB switches to the regular assessment, and negative assessments can lead to a formal objection to SRT recognition; the ECB also envisages ex-post sample checks and other examinations to verify template accuracy. Transactions falling under Article 250 of the Capital Requirements Regulation should be notified within 15 working days of execution, and any material event affecting an SRT assessment should be reported without undue delay.
European Central Bank - Banking Supervision 2025-12-19
European Central Bank Banking Supervision issues guide introducing fast-track notifications for significant risk transfer securitisations
The European Central Bank Banking Supervision issued a new guide for significant institutions on notifying the ECB for supervisory recognition of significant risk transfer (SRT) in securitisations, replacing its 2016 guidance. It introduces regular and fast-track notification routes for simpler transactions, with eligibility criteria including a portfolio size cap of EUR 8 billion and a Common Equity Tier 1 ratio impact capped at 25 basis points. Institutions must follow detailed notification timelines and criteria, with the ECB conducting ex-post compliance checks.