The PCS Risk Transfer Label

Together with the True Sale PCS Label, the Risk Transfer PCS Label is one of the two labels awarded by PCS.

This label may be awarded to European risk transfer instruments under which the credit risk of certain financial assets (or part of that credit risk) is transferred by a bank or other lender to investors.  In exchange for providing credit protection for these financial assets, the investors will receive interest.  In a risk transfer transaction, the assets for which credit protection are purchased are not, as in the case of a true sale securitisation, sold to a special purpose vehicle.

Awarded at the request of financial institutions which issue these instruments, the PCS Risk Transfer Labels will be awarded to transactions which fully meet the eligibility criteria set down by the PCS Association.

These criteria seek to capture some of the aspects of securities that are indicative of simplicity, asset quality and transparency and reflect some of the best practices available in the European securitisation market for risk transfer instruments. They also reflect the PCS Label’s focus on securitisations that help fund the real economy.

These criteria have been selected also by seeking to learn from the past and particularly from aspects of the market during the crisis that began in 2007.

However, market participant and visitors to this site must bear in mind that the selection of the criteria for both labels cannot reflect an objective, scientific process but is a subjective view as to what constitutes today simplicity, asset quality and transparency in the European market for risk transfer instruments.

Market participants and visitors to this site must also remember that the PCS Label is not a recommendation to buy, sell or hold any instrument (including securities). Nor is it investment advice or a credit rating. The label does not seek to express any view about the creditworthiness of individual instruments. In this respect, it is imperative that you read our disclaimer, which may be found here.

For more information on the Risk Transfer Label, please consult our Outline page and our Eligibility Criteria Summary section.

For information on transactions that have received a Risk Transfer PCS Label, please consult our Risk Transfer Transactions section.

Further information

    • PCS Risk Transfer Terms and Conditions more >
    • PCS Risk Transfer Procedures Manual more >
    • Label Fees more >