European Parliament Signals Delay for EU STS Implementation

According to a recent Reutersarticle, momentum for the proposed plan to relaunch ABS in Europe by lowering capital requirements for simple, transparent and standardized (“STS”) securitizations has come to a halt. The European Parliament will not vote on the plan before December, according to a member of the European Parliament, Paul Tang.

"We need a thorough technical analysis to make sure that we avoid the mistakes of the past," Tang explained. "We want to make sure that we have safe products."

Tang’s timetable anticipates talks with the European Commission (“EC”) on technical issues until the end of April with a report on the proposals prepared by the summer. The first vote of the Economic Affairs Committee of the European Parliament is scheduled for November.

The Parliament's final vote on the plan will be in December, but this remains to be confirmed in the timetable.

As Reuters explains, if the text adopted by lawmakers differs from the legislative proposals made by the EC and backed by EU states, a new set of open-ended negotiations among the EU institutions will have to start to agree to a common text.

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