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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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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