Criteria for identifying simple, transparent and comparable short-term securitisations proposed by BCBS and IOSCO

06 July 2017

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions released the consultative document Criteria for identifying simple, transparent and comparable short-term securitisations (the short-term STC criteria).

The short-term STC criteria maintain and build on the principles in the Criteria for identifying simple, transparent and comparable securitisations issued by BCBS-IOSCO in July 2015. The criteria published take account of the characteristics of asset-backed commercial paper (ABCP) conduits, such as:

• the short maturity of the commercial paper issued,
• the different forms of programme structures and
• the existence of multiple forms of liquidity and credit support facilities.

The criteria aim to assist the financial industry in its development of simple, transparent and comparable short-term securitisations. They were designed to help the parties to such transactions to evaluate the risks of a particular securitisation across similar products and to assist investors with their conduct of due diligence on securitisations. The BCBS has concurrently issued a consultative document Capital treatment for simple, transparent and comparable short-term securitisations outlining how the short-term STC criteria could be incorporated into the regulatory capital framework for banks.

BCBS and IOSCO welcome comments on all aspects of this consultative document by Thursday 5 October 2017.

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