International Bodies Publish Identification Criteria and Capital Treatment for Simple, Transparent and Comparable Short-Term Securitizations

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions have published an updated version of the sound practices document, "Criteria for identifying simple, transparent and comparable short-term securitisations", which was originally published in 2015. The Basel Committee has also published an updated version of its standards document, "Capital treatment for simple, transparent and comparable short-term securitisations".

The Basel Committee and IOSCO consulted on the proposed updated Criteria in July 2017. The Basel Committee consulted at the same time on proposed additional guidance and requirements for the purpose of applying preferential regulatory capital treatment for banks acting as investors in, or as sponsors of, STC short-term securitizations, typically in asset-backed commercial paper structures.

The updated Criteria take account of the characteristics of ABCP conduits, such as: (i) the short maturity of the commercial paper issued; (ii) the different forms of program structures; and (iii) the existence of multiple forms of liquidity and credit support facilities. The Basel Committee's updated standards document outlines how the updated Criteria could be incorporated into the regulatory capital framework for banks.

View the revised sound practices document, "Criteria for identifying simple, transparent and comparable short-term securitisations".

View the updated standards document, "Capital treatment for simple, transparent and comparable short-term securitisations".