In December 2017, the European Parliament and the European Council passed the STS Regulation (Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017) which, when it came into force on 1st January 2019, created a new kind of securitisation: the “simple, transparent and standardised securitisation” or “STS securitisation” benefiting from certain regulatory advantages over non-STS securitisations.
To be able to obtain STS status though, a securitisation will need to meet a long list of criteria. Some are complex and not always straightforward to analyse. Recognising that transitioning from the old market practice to the new STS regime may pose legal, structural, informational and IT challenges to issuers and investors, PCS is seeking to do as much as it can to assist. With this in mind, PCS will provide – upon request of any market participant – an STS Reports in respect of securitisations presented to it.
In addition, PCS will also, if so requested, analyse a securitisation against the additional criteria that a securitisation able to obtain STS status would need to meet to be able to benefit from the lower capital requirements set out in the Capital Requirements Regulation were it held by European Union banks (a CRR Report).
The STS criteria, as drafted in the STS Regulation, are subject to a potentially wide variety of interpretations. In compiling an STS Report , PCS will use the same interpretations as it uses in its STS Verifications.
However, an STS Report indicating compliance with any STS criteria is not and cannot be a definitive statement or promise or undertaking on behalf of PCS that this STS criteria will be considered to be met as a legal or regulatory matter.
Market participants and visitors to this site must also remember that the STS Reports are not a recommendation to buy, sell or hold any instrument (including securities). Nor is it investment advice or a credit rating. The report 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.
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