Framework for STS Securitisation

Summary

This regulation creates a new European framework for securitisation, introducing an 'STS' label for simple, transparent, and standardised products to improve market stability.
10 28.12.2017
Other
finance
economy
administrative law
information technology and data processing

Key points

  • Introduction of a specialized framework for 'Simple, Transparent, and Standardised' (STS) securitisation products.
  • Mandatory risk retention requirements where originators must keep a significant economic interest in the securitised assets.
  • Strict transparency obligations requiring regular disclosure of data regarding the underlying loans and cash flows to investors.
  • Requirements for asset homogeneity and the prohibition of active portfolio management to maintain simplicity.
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