General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
July 06, 2017

BCBS released the consultative document specifying capital treatment for simple, transparent, and comparable (STC) short-term securitizations. This consultation is in addition to the proposed criteria for identifying STC short-term securitizations, which BCBS issued jointly with IOSCO. The proposed capital treatment is consistent with the Basel Committee's July 2016 revisions to the securitization framework. Comments are due by October 05, 2017.

The consultative document on capital treatment for STC short-term securitizations outlines how the short-term STC criteria could be incorporated into the regulatory capital framework for banks. It sets out additional guidance and requirements for 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 (ABCP) structures. The additional guidance and requirements include that:

Investors have access to key monthly information on the performance and key characteristics of the ABCP structure

The redemption risk of the underlying assets is addressed from the sponsor's perspective

The transactions funded by the conduit have an enforceable legal structure

The relevant information is disclosed by the sponsor to investors

 

The 2016 standard sets out additional guidance and requirements for differentiating the capital treatment of STC short-term securitizations from that of other securitizations. Similarly, provided that the proposed criteria are met, STC short-term securitizations will receive the same reduction in capital requirements as other STC short-term securitizations. This enhances risk sensitivity of the framework without significantly increasing banks' operational burden in computing the applicable capital relief.

 

The second consultation contains the criteria for identifying STC short-term securitization. The criteria take account of the characteristics of ABCP conduits, such as the short maturity of the commercial paper issued, the different forms of program structures, and the existence of multiple forms of liquidity and credit support facilities. The short-term STC criteria maintain and build on the principles in the criteria for identifying STC securitizations, which was issued by BCBS-IOSCO in July 2015 and was included in the revised securitization standard issued in 2016.

 

Related Links

Consultation on Short-Term STC Securitization: Capital Treatment (PDF)

Consultation on Short-Term STC Securitization: Criteria (PDF)

Revised Securitization Framework, July 2016

Comment Due Date: October 05, 2017

Keywords: International, BCBS, Banking, STC, ABCP, Securitization

Related Insights
News

MAS Amends Notice 637 on Capital Adequacy Requirements in Singapore

MAS published the final, revised Notice 637 on the risk-based capital adequacy requirements in Singapore.

November 13, 2018 WebPage Regulatory News
News

ESMA Updates Q&A on Implementation of CSD Regulation and MAR

ESMA updated questions and answers (Q&A) documents on the implementation of the Central Securities Depository (CSD) Regulation and Market Abuse Regulation (MAR).

November 12, 2018 WebPage Regulatory News
News

FSB Finalizes and Publishes the Cyber Lexicon

FSB published a cyber lexicon, following the public consultation earlier this year.

November 12, 2018 WebPage Regulatory News
News

SRB Updates Liability Data Reporting Template for 2019

SRB published version 2.7.1 of the Liability Data Reporting (LDR) Template.

November 12, 2018 WebPage Regulatory News
News

IMF Publishes Reports on the 2018 Article IV Consultation with Chile

IMF published its staff report and selected issues report under the 2018 Article IV consultation with Chile.

November 09, 2018 WebPage Regulatory News
News

PRA Issues PS27/18 on Implementing the Extension of SM&CR to Insurers

PRA published the policy statement PS27/18, which provides feedback to responses to the consultation paper CP20/18, on implementing the extension of the Senior Managers and Certification Regime (SM&CR) to insurers (Part 2).

November 09, 2018 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for November 2018

EBA published answers to seven questions under the Single Rulebook question and answer (Q&A) updates for this week.

November 09, 2018 WebPage Regulatory News
News

FED Finalizes the Large Financial Institution Rating System

FED finalized the new supervisory rating system for Large Financial Institutions (LFIs), to better align with the current supervisory programs and practices for these firms.

November 09, 2018 WebPage Regulatory News
News

ECB Publishes Guides for Capital and Liquidity Management by Banks

ECB published the guides for capital and liquidity management by banks in EU.

November 09, 2018 WebPage Regulatory News
News

EC Amends Regulation on Prudent Valuation for Supervisory Reporting

EC published the amended Implementing Regulation (EU) 2018/1627 on prudent valuation for supervisory reporting. Regulation 2018/1627 amends the Implementing Regulation 680/2014.

November 09, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2199