Regulatory reform: European Union (EU) Securitisation Regulation
Effective 1 January 2019, the European Union (EU) Securitisation Regulation is designed to create a standardised securitisation framework for in-scope European securitisations. The new regulation will affect UCITS management companies, including J.P. Morgan Asset Management.
To explain more about the EU Securitisation Regulation and what it means for investors in J. P. Morgan Asset Management’s UCITS funds, we’ve designed an easy-to-use guide that addresses the key questions.
The EU Securitisation Regulation enforces quantitative and qualitative due diligence requirements on Institutional Investors, as defined by the regulation. These requirements must be met for an in-scope securitised position to be eligible to be purchased by a UCITS vehicle, or on behalf of other Institutional Investors.
The regulation includes transitional provisions that limit its impact on UCITS management companies. Based on guidance we have received from external sources we understand the due diligence requirements will only apply to UCITS management companies in relation to investments in securitisations issued or amended on or after 1 January 2019.
Therefore, we are of the view that our UCITS funds are not required to apply the mandated due diligence requirements (applicable to in scope securitisations) to either those securitisations purchased up to and including 31 December 2018, and those that are purchased after that date but which were issued on or prior to 31 December 2018 (and not amended post that date).
Our guide to the EU Securitisation Regulation contains more details on the impact of the new rules on J.P. Morgan Asset Management’s UCITS funds.
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