July 23, 2015 Alert: BCBS and IOSCO Release Final STC Criteria

This morning, the Basel Committee on Banking Supervision ("BCBS") and International Organization of Securities Commissions ("IOSCO") released their final criteria for simple, transparent and comparable ("STC") securitizations. The criteria are intended to be applied to term securitizations and assist in the financial industry's development of STC structures. According to the press release, they are not meant to substitute for investor due diligence and are non-exhaustive and non-binding. BCBS and IOSCO note that “The criteria are not, of themselves, a prescription for regulatory action.”

The BCBS and IOSCO initially proposed a framework for STC securitizations in December 2014. In the final version published today, BCBS and IOSCO “have amended certain aspects of the proposed criteria that were considered overly prescriptive, and have clarified other issues where respondents raised doubts about their interpretation or implementation.”

SFIG commented on the earlier proposal through its High Quality Securitization (“HQS”) Task Force on February 13, 2015. The HQS Task Force will reconvene soon to review the final framework and plan its next steps for advocacy on this topic. To join the HQS Task Force, please contact Amanda.Bateman@sfindustry.org

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