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Recital 11

Recital 11

(11)The asset selection requirements laid down in Article 6(2) of Regulation (EU) 2017/2402 are an integral part of the risk retention framework. If originators were able to cherry pick assets to securitise portfolios of worse credit quality, and in particular without the investors’ or potential investors’ knowledge, the purpose and effectiveness of risk retention to align the interests of originators and investors would be severely undermined. In that scenario, while the originator would be using the securitisation to offload risky assets, investors would be misled to rely on the originator’s retaining a slice of the risk as evidence of a proper alignment of interests. To avoid such a scenario and to provide for legal certainty and security, it is necessary to lay down criteria that originators may rely on to ensure compliance with Article 6(2) of Regulation (EU) 2017/2402. Furthermore, criteria for the determination of ‘comparable assets’ should also be provided. Securitisations where the comparison referred to in Article 6(2) of Regulation (EU) 2017/2402 is not possible because all the comparable assets were transferred to the SSPE should be considered as meeting the requirements of that paragraph, provided that the fact that such comparison is not possible is disclosed in the final offering document, prospectus, transaction summary or overview of the main features of the securitisation.

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