Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I move amendment No. 1:

In page 9, to delete lines 24 to 26 and substitute the following:“ (c) either—

(i) the originator, sponsor or original lender of the securitisation, or

(ii) in the case of a traditional NPE securitisation, the servicer, where it can demonstrate that it has expertise in servicing exposures of a similar nature to those securitised and that it has well-documented and adequate policies, procedures and risk-management controls in place relating to the servicing of exposures as required by Article 6 of the Securitisation Regulation,

is required to retain on an ongoing basis a material net economic interest in the securitisation of not less than 5 per cent.”,”.

I will give a short explanatory note if that is satisfactory. Amendments Nos. 1 and 2 amend section 2 of the Bill, which in turn provides for a number of amendments to section 28 of the Central Bank Act 1997. This is an important section of the Act as it sets out the scope of the Central Bank regulated businesses, including the regulated business of retail credit firms and credit servicing firms.

The amendments are necessary because since the Bill was published in June of last year, section 28 of the Central Bank Act 1997 was subsequently amended by SI 561 of 2021, that is, the European Union (General Framework for Securitisation and Specific Framework for Simple, Transparent and Standardised Securitisation) (Amendment) Regulations 2021. That statutory instrument was necessary to give full effect to the amended EU securitisation, that is, EU Regulation No. 2021/557, and the securitisation amendments of the capital markets security package.

If these two amendments are not accepted, it would essentially undo the changes to the Act which, as I already mentioned, were made last year by the statutory instrument. The amendments provide that the passive securitisation vehicles, which falls within the scope of the amended EU securitisation regulation, will fall outside the scope of the requirement to be authorised as a credit servicing firm.

Essentially, a statutory instrument was necessary over the course of the last year since this Bill was published. We need to include this here otherwise that will fall. It is, therefore, almost a technical amendment.