Regulation (EU) No 575/2013 of the European Parliament and of the CouncilDangos y teitl llawn

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance)

[X1[F1 Article 242 U.K. Definitions

For the purposes of this Chapter, the following definitions apply:

(1) ‘ clean-up call option ’ means a contractual option that entitles the originator to call the securitisation positions before all of the securitised exposures have been repaid, either by repurchasing the underlying exposures remaining in the pool in the case of traditional securitisations or by terminating the credit protection in the case of synthetic securitisations, in both cases when the amount of outstanding underlying exposures falls to or below certain pre-specified level;

(2) ‘ credit-enhancing interest-only strip ’ means an on-balance sheet asset that represents a valuation of cash flows related to future margin income and is a subordinated tranche in the securitisation;

(3) ‘ liquidity facility ’ means a liquidity facility as defined [F2in regulation 32A of the Securitisation Regulations 2024];

(4) ‘ unrated position ’ means a securitisation position which does not have an eligible credit assessment in accordance with Section 4;

(5) ‘ rated position ’ means a securitisation position which has an eligible credit assessment in accordance with Section 4;

(6) ‘ senior securitisation position ’ means a position backed or secured by a first claim on the whole of the underlying exposures, disregarding for these purposes amounts due under interest rate or currency derivative contracts, fees or other similar payments, and irrespective of any difference in maturity with one or more other senior tranches with which that position shares losses on a pro-rata basis;

(7) ‘ IRB pool ’ means a pool of underlying exposures of a type in relation to which the institution has permission to use the IRB Approach and is able to calculate risk- weighted exposure amounts in accordance with Chapter 3 for all of these exposures;

(8) ‘ mixed pool ’ means a pool of underlying exposures of a type in relation to which the institution has permission to use the IRB Approach and is able to calculate risk- weighted exposure amounts in accordance with Chapter 3 for some, but not all, of the exposures;

(9) ‘ overcollateralisation ’ means any form of credit enhancement by virtue of which underlying exposures are posted in value which is higher than the value of the securitisation positions;

(10) ‘ simple, transparent and standardised securitisation ’ or ‘ STS securitisation ’ means—

[F3(a)an STS securitisation as defined in regulation 9 of the Securitisation Regulations 2024,]

[F4(b)an overseas STS securitisation as defined in regulation 12(2) of the Securitisation Regulations 2024][F5, or

(c)a qualifying EU securitisation as defined in regulation 12(3) of the Securitisation Regulations 2024;]

(11) ‘ asset-backed commercial paper programme ’ or ‘ ABCP programme ’ means an asset backed commercial paper programme or ABCP programme as defined in [F6regulation 3(1) of the Securitisation Regulations 2024];

(12) ‘ asset-backed commercial paper transaction ’ or ‘ ABCP transaction ’ means an asset-backed commercial paper transaction or ABCP transaction as defined in [F7regulation 3(1) of the Securitisation Regulations 2024];

(13) ‘ traditional securitisation ’ means a traditional securitisation as defined [F8for the purposes of rules made by the PRA under section 137G of FSMA in relation to securitisation];

(14) ‘ synthetic securitisation ’ means a synthetic securitisation as defined [F9for the purposes of rules made by the PRA under section 137G of FSMA in relation to securitisation];

(15) ‘ revolving exposure ’ means a revolving exposure as defined [F10for the purposes of rules made by the PRA under section 137G of FSMA in relation to securitisation];

(16) ‘ early amortisation provision ’ [F11means a contractual clause in a securitisation of revolving exposures or a revolving securitisation, as defined for the purposes of rules made by the PRA under section 137G of FSMA in relation to securitisation, which requires, on the occurrence of defined events, investors’ securitisation positions to be redeemed before the originally stated maturity of those positions];

(17) ‘ first loss tranche ’ means a first loss tranche as defined [F12for the purposes of rules made by the PRA under section 137G of FSMA in relation to securitisation];

(18) ‘ mezzanine securitisation position ’ means a position in the securitisation which is subordinated to the senior securitisation position and more senior than the first loss tranche, and which is subject to a risk weight lower than 1 250  % and higher than 25 % in accordance with Subsections 2 and 3 of Section 3;

[F13(19)“promotional entity” means any undertaking or entity—

(a)which is established by a government department or devolved administration or by a local authority in any part of the United Kingdom (“the establishing body”);

(b)which grants promotional loans or guarantees;

(c)whose primary goal is not to make profit or maximise market share, but is to promote public policy objectives of the establishing body; and

(d)in relation to which F14...—

(i)the establishing body is obliged to protect its economic basis and maintain its viability throughout its lifetime; or

(ii)at least 90% of its original capital or funding or the promotional loan it grants is directly or indirectly guaranteed by a government department, a devolved administration or a local authority in any part of the United Kingdom.]]]

Editorial Information

Textual Amendments

F4Art. 242(10)(b) substituted (30.1.2024 for specified purposes, 1.11.2024 in so far as not already in force) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 2 para. 2 (with Sch. 3) (as amended by S.I. 2024/705, regs. 1(2), 2(2))

F14Words in Art. 242(19) omitted (31.12.2020 immediately after IP completion day) by virtue of The State Aid (Revocations and Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1470), reg. 1(3), Sch. 1 para. 3(3) (with Sch. 3)