Simple, Transparent, Standardised Securitisation (STS) focuses on criteria to identify simple, transparent and comparable securitisation instruments.
Simple refers to the homogeneity of underlying assets with simple characteristics, and a transaction structure that is not overly complex.
Transparency: provide investors with sufficient information on the underlying assets, the structure of the transaction and the parties involved in the transaction, thereby promoting a more comprehensive and thorough understanding of the risks involved. The manner in which the information is available should not hinder transparency, but instead support investors in their assessment.
Standardisation promoting comparability could assist investors in their
understanding of such investments and enable more straightforward comparison across
securitisation products within an asset class. Importantly, they should appropriately take into account differences across jurisdictions.
This framework is aligned to equivalent initiatives in the Basel Regime. Similar alignment is seen in other markets where Securitisation products are seen: in Solvency II; in Money Market Funds etc.
Securitisation Products covered: Asset Backed Securities, Asset Backed Commercial Paper, CDOs, Commercial / Residential Mortgage Backed Securities, Consumer Asset Backed Securities, etc.