L 174/16 Official Journal of the European Union 13.6.2014 COMMISSION DELEGATED REGULATION (EU) No 625/2014 of 13 March 2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council by way of regulatory technical standards specifying the requirements for investor, sponsor, original lenders and originator institutions relating to exposures to transferred credit risk (Text with EEA relevance) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Y), and in particular Article 410(2) thereof, Whereas: (1)  The retention of an economic interest aims at aligning interests between the parties respectively transferring and assuming the credit risk of the securitised exposures. Where an entity securitises its own liabilities, alignment of interests is established automatically, regardless of whether the final debtor collateralises its debt. Where it is clear that the credit risk remains with the originator the retention of interest by the originator is unnecessary and would not improve on the pre-existing position. (2) It is appropriate to clarify when exposure to transferred credit risk is deemed to occur in relation to certain specific instances in which institutions, other than when acting as originator, sponsor or original lender, may become exposed to the credit risk of a securitisation position, including when institutions act as a counterparty to a derivative instrument with the securitisation transaction, as a hedge counterparty with the securitisation transaction, as a liquidity facility provider to the transaction and when institutions hold securitisation positions in the trading book in the context of market making activities. (3)  In re-securitisation transactions credit risk transfer occurs at the level of the first securitisation of assets and at the second ‘repackaged’ level of the transaction. The two levels of the transaction, and the two corresponding instances of credit risk transfer, are independent with respect to the requirements set out in this Regulation. Retention of net economic interest and due diligence should be ensured at each level of the transaction by the institutions that become exposed to transferred credit risk at that particular level. Therefore if an institution becomes exposed only to the second ‘repackaged’ level of the transaction, the requirements relating to retention of net economic interest and due diligence only apply to that institution in relation to the second level of the transaction. Within the same re-securitisation transaction, those institutions who became exposed to the first level of securitisation of assets should comply with the retention and due diligence requirements in relation to the first level of securitisation in the transaction. (4) It is appropriate to specify in greater detail the application of the retention commitment including compliance when there are multiple originators, sponsors or original lenders, details regarding the different retention options, how to measure the retention requirement at origination and on an on-going basis, and how to apply the exemp- tions. (5)  Points (a) to (¢) of Article 405(1) of Regulation (EU) No 575/2013 lay down various options pursuant to which the required retention of interest may be fulfilled. This Regulation, clarifies in detail the ways to comply with each of those options. (6)  The retention of an interest could be achieved through a synthetic or contingent form of retention, provided that such methods fully comply with one of the options laid down in points (a) to () of Article 405(1) of Regulation (EU) No 575/2013, to which the synthetic or contingent form of retention can be equated, and provided that compliance with the disclosure requirements is ensured. (7)  Hedging of or selling the retained interest is prohibited where those techniques undermine the purpose of the retention requirement, implying that they can be permitted where they do not hedge the retainer against the credit risk of either the retained securitisation positions or the retained exposures. () OJL176,27.6.2013,p. 1.