A benefit of a securitisation being STS is that it allows European banks investing in such a securitisation to allocate a lower amount of capital against that position than would otherwise be required of a non-STS securitisation. This provision is set out in the Capital Requirements Regulation (Regulation (EU) 2017/2401).
However, in order for this benefit to be available a securitisation must not only be STS but also meet an additional 4 criteria.
In addition to an STS verification, PCS will provide a CRR assessment in which it will address these additional 4 criteria.
The CRR assessment operates in the same manner as the STS verification: PCS will complete a checklist containing the additional 4 points based on documentation provided by, or on behalf, of the originator or sponsor.
We strongly advise all visitors to this site to read our “Disclaimer” for a better understanding of the nature of all PCS Labels.
In order to meet regulatory requirements, it is not possible for an originator or sponsor to engage PCS only for a CRR assessment without engaging PCS for an STS verification of the same transaction.
As a CRR assessment is always part of an STS verification, application for a CRR assessment is made by ticking the CRR assessment box in either the Application Form for an STS Verification and Assessment for PCS UK, or the Application Form for an STS Verification and Assessment for PCS EU, as appropriate.
The fees for a CRR assessment shall be payable in Euros or Pounds Sterling depending on the currency in which the securities are denominated.
The STS regulations do not allow the fees payable to third party verification agents to be dependent on the result of the verification activities. This includes the fees for any ancillary activities such as CRR assessments. Therefore originators and sponsors must bear in mind that the fees become payable on the receipt of an application form and acceptance by PCS of the engagement and (save in certain exceptional circumstances detailed in the PCS Terms & Conditions) irrespective of whether the STS Verification or CRR assessment is completed.
The CRR assessment fee, if denominated in Euros is: €1,500 + VAT (if applicable)
The CRR assessment fee, if denominated in GBP is: £1,500 + VAT (if applicable)
There is no annual maintenance fee.
Note: To reflect the complexity and time required by assessments which is greater than originally anticipated and as announced a few weeks ago, PCS has now increased the fees to £1,500 for sterling denominated assessments and Euro 1,500 for euro denominated assesments (plus, in both cases, VAT if applicable). This change applies to all applications sent to PCS on or after February 17th, 2020 (save for client having received written quotes at the old rate and for which the old rate will apply.) As currently, there will be no annual maintenance fees.
The fees are set by PCS UK and PCS EU on a group wide basis to meet the expenses of running the PCS initiative. No money is paid by way of dividend to any shareholders or members of the PCS Association (PCS UK’s and PCS EU’s parent) and the PCS initiative as a whole is run on a not-for-profit basis.
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