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