Basel Committee Finalizes Standards on Simple, Transparent and Comparable Short-Term Securitisations

The Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) finalized, in two separate issuances, both the Criteria for Identifying and the Capital Treatment for simple, transparent and comparable (STC) short-term securitisations.

WOCCU supported much of the proposal but urged various changes on both the Capital Treatment and the Criteria proposals designed to assist credit unions in the development of simple, transparent, and comparable short-term securitisations.

Key changes included in the final standard include reducing the minimum performance history for non-retail and retail exposures at five years and three years, respectively, and clarifying that the provision of credit and liquidity support to the asset-backed commercial paper structure can be performed by more than one entity, subject to certain conditions.  Finally, WOCCU recommended changes were made to clarify that the criteria do not automatically exclude equipment leases and auto loan and lease securitisations from the short-term STC framework.

The final proposal on the Capital Treatment can be viewed here and the final proposal on the Criteria can be viewed here.