Brussels, 23/07/2015 (Agence Europe) - The Basel Committee on Banking Supervision (BCBS) and the International Organisation of Securities Commissions (IOSCO) on Thursday 23 July released criteria to identify simple, transparent and comparable securitised products.
“The purpose of these criteria is to assist in the financial industry's development of simple, transparent and comparable securitisation structures. They are not intended to serve as a substitute for investors' due diligence”, IOSCO states in a press release.
Criteria promoting simplicity refer to the homogeneity of underlying assets with simple characteristics, and a transaction structure that is not overly complex. Criteria on transparency provide investors with sufficient information on the underlying assets, the structure of the transaction and the parties involved in the transaction, thereby promoting a more thorough understanding of the risks involved. Criteria promoting comparability could assist investors in their understanding of such investments and enable more straightforward comparison between securitisation products within an asset class.
These criteria, which are non-binding, will feed into the European Commission's reflection which will lead, in October, to a legislative proposal for a revitalisation of the securitisation markets in the framework of the Capital Markets Union (CMU) project. (Mathieu Bion)