Brexit has resulted in a new set of UK rules for securitisations. These rules largely follow the pre-existing EU rules in most, but not all, areas. This article examines the scope of the new rules, their potential impact on securitisations and the practical issues to consider in documentation.
Prior to Brexit, the main securitisation legislation in the UK consisted of EU legislation directly applicable in the UK, comprising the EU Securitisation Regulation. These rules have been onshored in the UK and amended to ensure they work in a UK context. The PRA/FCA have also temporarily suspended or modified certain provisions in the UK to allow time to adjust to the new UK rules.
The UK and EU rules exist in parallel and, depending on a number of factors, may both be relevant a securitisation. Although perhaps difficult to qualify, there is also the risk that UKSR and EUSR diverge over time.