PRIMER STS securitisations: the opposite of simple

Author: Amélie Labbé | Published: 29 May 2018

What qualifies as a simple, transparent and standardised securitisation?

One component of the EU's Capital Markets Union project is to ensure that securitisations are carried out in a transparent and risk-reflective manner, and that they are of high quality. As with many other financial instruments, this more cautious approach is a direct reaction to practices that were brought to light by the financial crisis.

Two new regulations take effect in January 2019 that aim to introduce a consolidated framework for securitisations in the EU: the Securitisation Regulation and an accompanying framework outlining the capital treatments of different types of asset-backed deals (known as the Capital Requirements Regulation or CRR). These have been in the pipeline since 2015.

The Securitisation Regulation introduces rules for simple, transparent and standardised (STS) securitisations which cover all asset-backed transactions, without differentiating according to the type of investor – as was the case under the previous...