On the 12^th May 2015, the Joint Committee of the three European Supervisory Authorities (ESAs) published a report highlighting recommendations aimed at ensuring consistency in connection with the disclosure requirements and obligations relating to due diligence, supervisory reporting and retention rules in existing EU law on Structured Finance Instruments (SFIs).

Accordingly, the ESAs’ Report sets out a series of recommendations for consideration in light of further work on the transparency requirements of SFIs and the European Commission public consultation on securitisation. The Report states that these recommendations should not be introduced in isolation and should take into account the already existing requirements for disclosure, due diligence and reporting for comparable instruments.

The aforementioned recommendations broadly comprise:

• EU-wide harmonisation of due diligence requirements;
• Standardisation of investor reports reflecting the dynamics of SFIs, which reports should be stored in a centralised public space;
• Enablement of all types of investors to effectively conduct their own stress tests; and
• The harmonised due diligence and disclosure framework should be duly supported by a comprehensive regime for supervision and enforcement.

The ESAs’ recommendation are geared towards restoring investor confidence in this sector and to increasing its efficiency.