EU NEW SECURITISATION

EU New Securitisation Framework For Non‑EU Issuers

Since the new European Union securitisation framework came into effect, further debate around Article 7 transparency requirements and the European Securities and Markets Authority templates’ applicability to non‑EU issuers followed around the world. The application of these requirements to non‑EU transactions is ambiguous and open to interpretation.

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CHRONOLOGY

THE AUSTRALIAN BUSINESS SECURITISATION FUND IN A NUTSHELL

In face of the current status quo, where the big four banks in Australia account for over 80% of small business lending, often charging higher rates and imposing tougher conditions to grant these borrowers access to credit, the Australian Business Securitisation Fund comes as an alternative to facilitate the non-bank lenders’ participation in this market and to promote more competition/liquidity and therefore better conditions for SMEs to secure a loan.

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STS Compliance and Ki

On 17 January 2018, the EU Regulation introduced a new regulatory framework for securitisation transactions. This was published in the Official Journal of the European Union. The regulation covers:

  • Due Diligence
  • Risk Retention
  • Transparency
  • Criteria for granting credit
  • A ban on re-securitisations
  • Requirements for SSPEs (Securitisation Special Purpose Entities)
  • Establishment of and procedures related to Securitisation Repositories
  • Framework for STS

The attached document highlights some of the key provisions of the regulation, as an aid to our current and future clients, along with, where applicable, an explanation of how Moody’s can help address the applicable tasks. This document is not meant to be an exhaustive review of the regulation and Moody’s recommends organisations review the regulations on their own.

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Residential Mortgage Obligations in New Zealand

This paper aims to explain the proposed and under consultation Residential Mortgage Obligations (RMO) Framework which the Reserve Bank of New Zealand (RBNZ) thinks is the answer to improve the depth of capital markets and economic stability for New Zealand’s economy. This paper starts with the raison d’être for RMO framework introduction and why the RBNZ is proactively driving its implementation. The paper then delves into what the framework is about, and then bulk of the paper aims to present to the market participants, the “how” of the RMO framework.

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STS CRITERIA UNDER THE NEW EUROPEAN REGULATORY FRAMEWORK FOR SECURITISATION

Since the global financial crisis of 2007-2008, the securitisation market has been struggling to recover. Volumes have decreased and regulatory burden for issuers and investors has frozen the market. In an attempt to revitalise the economy through the diversification of funding sources and to promote further integration of the EU capital markets, Regulators issued a new European regulatory framework for securitisations. Under this new regulatory framework, securitisation deals should be considered of “high quality” and therefore have less penalising risk weights if their underlying exposures and the cash flows resulting from them are characterised as simple, if they are transparent with regards to the level of information disclosed to investors and if they have standardised and thus comparable structures.

While there are still remaining areas of ambiguity, in this report, Moody’s Analytics will try to address some of the main concerns of the market and dig deeper into the criteria set within the STS requirements.

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Ki™ Technology Overview

Overview
Ki is architected as a multi-tier highly scalable microservice application, built to address the
unique data, funding, analytics, deal structuring, and reporting needs of the structured finance
market. The platform is built upon leading edge “big-data” technologies, and is capable of
handling data workloads of all sizes in a very efficient and cost-effective fashion.
Ki has been architected using best of breed technologies across all layers of the technology
stack. Our design principles ensure that the solution provides high performance, options for
high availability, and a deployment model which enables scalability in all dimensions.

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