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EFAMA presented its views on BCBS/IOSCO’s proposals for setting criteria which will facilitate the analysis of each securitized instrument by financial market participants in identifying securitization structures of greater transparency.
EFAMA believes that the proposed criteria are not sufficient to restore confidence and invest into securitised instruments. Several other elements should also be taken into account:
With regards to asset selection and transfer, EFAMA believes that the exclusion of actively managed assets is not appropriate. In EFAMA’s view, the proposed exclusion of actively managed assets or selected on a discretionary basis is not appropriate for the purpose of identifying STC securitisations. A portfolio which is actively managed by a regulated manager having a good track record is, from various perspectives, similar to a non‐actively managed portfolio made of assets having good performance history.
EFAMA further notes that the regulatory capital treatment for securitization positions put ABS bonds at a disadvantage compared to other asset classes like, for example, covered bonds and hence forms a major obstacle for the development of short‐term securitization markets.