Criteria for identifying simple, transparent and comparable securitisations

This version

BCBS  | 
Sound practices
23 July 2015
Status:  Current
Topics: Credit risk

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) today released final Criteria for identifying simple, transparent and comparable securitisations. The criteria are available on the websites of the Bank for International Settlements and IOSCO.

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.

These criteria apply only to term securitisations and are non-exhaustive and non-binding. Additional and/or more detailed criteria may be necessary based on specific needs and applications.

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. The form in which the information is available should not hinder transparency, but instead it should support investors in their assessment.

Criteria promoting comparability could assist investors in their understanding of such investments and enable more straightforward comparison between securitisation products within an asset class.