SFIG Comments on Basel Proposals on STC Criteria and Capital Treatment for Short-Term Securitization

Today SFIG submitted a response to the Basel Committee on Banking Supervision's (BCBS) consultative document: Capital treatment for simple, transparent and comparable (STC) short-term securitisations. The proposed capital treatment supplements the consultative document: Criteria for identifying STC short-term securitisations issued jointly with the International Organization of Securities Commissions.

The consultative document on capital sets out 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 (ABCP) structures. SFIG's letter focuses on: 1) adopting Alternative Approach 2 for determining compliance with STC criteria, 2) separating the treatment of conduit and transaction-level exposures and 3) revising short-term STC criteria to accommodate revolving asset pool securitizations.

Contributing to the response were the ABCP Committee, the HQS Task Force and the Regulatory Capital & Liquidity Committee. If you would like to join any of these committees, please contact Alyssa.Acevedo@sfindustry.org.

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