In order to obtain a PCS Label, securities must meet all the applicable eligibility requirements. When taking into account the various jurisdictions and asset class requirements, the PCS Label eligibility criteria are quite numerous and can be found in their entirety PCS Risk Transfer Eligibility Criteria. Depending on the nature of the transaction, only some of the criteria will be relevant though.

The criteria are designed to capture the key elements of quality, transparency and simplicity that underpin the whole PCS Initiative. Below are set out some of the key elements of the PCS Risk Transfer Label.

Eligible Asset Classes

The PCS Risk Transfer Label is to be awarded to transactions securitising assets which are important to the funding of the real economy and which have shown resilience through the crisis. Assets-backed securities eligible for the PCS Risk Transfer Label will therefore be backed by the following assets:

  • Auto Dealer Floorplan Loans
  • Auto Loans and Auto Leases
  • Auto Fleet Leases
  • Consumer Loans
  • Credit Card Receivables
  • Non-Auto Leases
  • Residential Mortgage Loans
  • SME Loans
  • Corporate Loans

However, in these asset classes some categories are excluded, such as “sub-prime” mortgages (e.g. self-certification products, equity release products).

Additional asset classes may be added in the future.

Eligibility Requirements

Although the full eligibility requirements can be found in the PCS Risk Transfer Eligibility Criteria, set out here are some of the highlights:


  • Strict criteria exist regarding such credit components such as loan-to-value.
  • The protection buyer must incorporated in the European Union, the European Economic Area or Switzerland.
  • Strict criteria exist to deal with the quality of underwriting
    (e.g. underwritten residential mortgages).
  • Strict criteria exist regarding the use of verification agents.
  • No “arbitrage” transactions are eligible.
  • Clear rules are set out for any collateral (although collateral is not a PCS Label requirement).


  • Re-securitisations are not eligible for the PCS Label.
  • Strict criteria exist as to the credit loss events that can trigger an investor payment.
  • No transactions with embedded maturity transformation are eligible.


  • The protection buyer must provide loan level and cash flow data.
  • Strict criteria exist as to what needs to be disclosed by the protection buyers.
  • Specific disclosure requirements for “significant risk transfer (SRT)” transactions.


Further information

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