News - PCS

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08/12/2015

Baroness Sharon Bowles and Waleed El-Amir join the board of PCS

PCS is delighted to announce that Baroness Sharon Bowles and Waleed El-Amir have joined the board of the PCS Association. At the General Meeting of the PCS Association, the current board was unanimously re-elected. In addition, Waleed El-Amir, Head Group Strategic Funding and Portfolio at Unicredit was elected to replace Mirco Bianchi who has taken on extensive new responsibilities within the Unicredit Group. Also Sharon Bowles, a member of the British House of Lords and former Member of the European Parliament and former Chair of its Economic and Monetary Affairs Committee has joined the PCS Board. She will be replacing […]

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01/12/2015

The Council text on CRR Regulation is published

The Council text on the CRR Regulation, which now reflects the position that will be forwarded to the European Parliament has just been published. We expect to issue a fuller analysis as soon as possible.

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01/12/2015

The Council text on STS Regulation is published

The Council text on the STS Regulation, which now reflects the position that will be forwarded to the European Parliament has just been published. Upon a quick perusal this text seems to be another large step forward from the already excellent work done by the Commission. It appears to address many of the residual concerns that had been expressed by stakeholders, including ourselves, and in particular issues around ABCP and third party certification. We expect to issue a fuller analysis as soon as possible.

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18/11/2015

Insurance Europe publishes its response to the Commission's proposals on STS securitisation

Insurance Europe, the representative body of the European insurance industry, has published its response to the Commission's STS securitisation proposals. As with many stakeholders in European finance, Insurance Europe is favourable to the Commission's approach to reforming the regulations around securitisation through the STS definition. In common with most other voices in this debate, including PCS, it believes the proposed STS definition is broadly correct and workable. The response does focus though on some of the same issues to which we, at PCS, had drawn attention. These include the non-neutrality of capital charges. The inexplicably high degree of non-neutrality which […]

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10/11/2015

The Basel Committee releases a consultation document on STC securitisation

Today, the Basel Committee released a consultation document on “simple, transparent and comparable” (STC) securitisations. PCS has not yet had the opportunity to review this consultation, but fully expects to respond to it by the deadline of 5th February 2016. The BCBS’ own text accompanying the release reads as follows: “The Criteria for identifying simple, transparent and comparable securitisations (STC criteria) were published by the Basel Committee and the International Organization of Securities Commissions in July 2015. The July 2015 STC criteria are designed to mitigate securitisation risks, including uncertainty related to asset risk, structural risk, governance and operational risk. Transactions […]

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21/10/2015

New elegant solution proposed to the problems of the current securitisation proposals on bank capital

As PCS has consistently argued, the current proposals regarding capital requirement for banks’ holding securitisations appears excessive when compared to the capital required to hold the underlying assets (the “non-neutrality problem”). In addition, the approach inherited from the Basel Committee of a hierarchy of analyses, when applied to the differing regulatory and general conditions of the United States and the European Union leads to an unfair and punitive treatment of European banks compared to their US counterpart. PCS has, in the past, argued for a recalibration of the excessively and inexplicably punitive “external ratings based approach” (“ERBA”) that the European […]

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14/10/2015

Oudea skeptical about the Commission’s proposals

Reuters has published an article quoting skeptical remarks made by Frederic Oudea, the boss of Societe Generale, on the impact of the Commission’s securitisation proposals. After an initial welcome of the Commission’s plans, these statements reflect the growing concern of many that despite 85% of the proposals being excellent, the 15% in need of further work may still derail the Commission’s ambition for a revived market. Investors concerns around the lack of a “common language” provided by third party certification, issuer concerns with the nature of the attestation required of them, general concerns about the issue of how a complex definition will […]

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30/09/2015

Commission’s securitisation proposal is out

Today, the European Commission published its proposals on securitisation within the Capital Markets Union project. Based on an earlier draft leaked by the Financial Times, there was much to commend the Commission’s approach, some items to keep an eye on and some issues which were serious enough to have the potential to derail the chances of market recovery altogether. First, the Commission should be commended for a number of very positive aspects: (a) there is a definition of simple, transparent and standardised (STS) securitisation to be used to bifurcate the regulatory outcomes for this financing channel as a whole; (b) […]

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15/09/2015

PCS publishes updated Rule Book for Belgian RMBS criteria

PCS has today published its updated version 9 Rule Book, Eligibility Criteria and Checklist. The new versions contain criteria for a new section, Belgian RMBS criteria. The updated version 9 Rule Book, Eligibility Criteria and Checklist, together with a blackline comparison of the Rule Book and Eligibility Criteria can be found on the PCS Website.

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23/07/2015

BCBS and IOSCO release their proposed definition of simple, transparent and comparable (STC) securitisation

Today, the Basel Committee on Banking Supervision and IOSCO have released the report containing their proposed definition of simple, transparent and comparable (STC) securitisation. PCS will be reading these with great interest. A brief, preliminary and cursory look reveals similarities with the EBA's recent advice to the Commission. Also noteworthy is the statement in the press release accompanying the report that "[a]lthough the criteria are not, of themselves, a prescription for regulatory action, the Basel Committee is exploring how these criteria could be incorporated into the securitisation framework revised in December 2014". This is official confirmation of developments that had […]

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08/07/2015

EBA publishes its report on qualifying securitisation

Yesterday saw the publication of the EBA report on qualifying securitisation. The publication follows the public hearing held a couple of weeks ago and sets out the detailed advice provided by the EBA to the European Commission. PCS is still reviewing the 135 pages of the report and is looking forward to the clarifications announced during the public hearing to some of the more technical aspects of the proposed EBA definition of "simple, transparent and standardised" securitisations.

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29/06/2015

PCS grants its 100th label

As the regulatory debate on "STS securitisation" fast approaches the stage of concrete proposals, PCS is delighted to announce that it has issued its 100th and 101st high quality securitisation labels to Master Credit Cards PASS Compartment France 2015-1, a French credit card securitisation issued by Carrefour Banque (label 100) and HIGHWAY 2015-1, a Dutch auto fleet lease securitisation issued by Athlon Car Lease Nederland (label 101) respectively. With these milestones, the volume of transactions which the market has entrusted to the PCS Label reaches € 136 billion of PCS labelled senior notes (and €154 billion by total securitisation transactions […]

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26/06/2015

EBA publishes the outline of its advice to the Commission on securitisation

Today, the European Banking Authority held a public hearing and published the outline of its technical advice to the Commission on simple, transparent and standardised securitisation. The presentation has much to commend it. The definition of STS securitisation closely follows the EBA's original proposals with some notable improvements in areas where stakeholders had raised concerns (such as the no-credit impairment requirement). On a number of other areas of concern, we will need to wait for the full report (publication announced for early July) in which the EBA has promised the more detailed answers needed to gauge the definition's suitability. In […]

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11/06/2015

PCS publishes paper on the operationalisation of STS rules

There is a strong consensus amongst observers of the European financial landscape that the Commission's moves towards a "simple, transparent and standardised" securitisation regulatory regime are a very positive development. Yet a number of market participants have also expressed concerns that, notwithstanding potentially good rules, the new regime could still fail to bring investors back to securitisation. The worry is that regulatory risks and costs could overwhelm the benefits of investing. PCS has just published a paper looking at these issues and putting forward proposals for a structure that would "operationalise" the new regulatory regime in an efficient and effective […]

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10/06/2015

European Commission publishes responses to securitisation consultation

Today, the European Commission published the responses to the consulation on securitisation within the CMU project. The Commission received 120 responses, indicating the great level of interest in this issue from many different stakeholders. As we understand it, these responses will be reviewed with a view to the Commission publishing a concrete proposal in September of this year. This proposal will center on a definition of "simple, transparent and standardised" securitisation and a regulatory infrastructure bifurcated around such definition. Issues which we believe remain still very much open are the inclusion of rules around synthetic securitisations, asset backed commercial paper […]

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21/05/2015

PCS files its response to the Commission's consultation

Last week, the PCS response to the Commission's securitisation consultation was filed. PCS is strongly supportive of the Commission's approach. In our response we recommend that the process of crafting the definition of "simple, transparent and standardised" securitisation be anchored in the excellent work of the European Banking Authority. Our response also focuses on the issue broached by the Commission regarding the operationalisation of the potential new regulatory scheme. PCS had expressed the view that the success of the new regulatory scheme in revitalising a European securitisation market on a safe basis would depend not only on the definitions and […]

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21/04/2015

PCS publishes new paper: “The illusory promise of self-attestation”

In the recent publication of the joint Bank of England and ECB response to the European Commission’s consultation on securitisation, the proposal was made to anchor the new regulatory framework on self-attestation by the issuers. This led us to reflect on the difficulties of such an approach and to conclude that it would prevent any meaningful market renewal. We felt that the issues around how to “operationalise” the new framework were crucial to prevent a theoretically sound approach from being negated by self-defeating functional requirements. To assist in framing this debate, we decided to publish the PCS views on self-certification […]

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01/04/2015

British Treasury publishes its response to the EC Green Paper

Her Majesty's Treasury has published early its response to the European Commission's consultation on the Capital Markets Union (CMU). On the securitisation chapter, HMT's response is supportive of the introduction of a definition of qualifying securitisation through a EU directive. The response was published early (as the deadline in May 13th) to respect the convention whereby the civil service eschews the publication of policy documents close to a general election. The British government's position, which we welcome, appears very much in line with the current direction of travel on securitisation within the Commission. It would seem that growing support is […]

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30/03/2015

Bank of England and ECB respond to the EU Consultation on securitisation

The Bank of England and the ECB released a joint-response to the European Commission Consultation on securitisation. In their response they appear curiously to favour issuer self-certification of quality. This approach, which is not that of the PCS, is quite a bold one in the light of the events that precipitated the financial crisis. It remains to be seen whether it is one that commends itself to policy makers and investors who suffered the consequences of the sales by issuers of purportedly high quality securitisations that then suffered such dramatic losses.

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18/02/2015

European Commission publishes today a Green Paper on the Capital Markets Union together with a new consultation on securitisation

Today, the European Commission publishes its Green Paper on the Capital Markets Union. In the paper its sets out five priority for early action, of which the building of a sustainable securitisation market is one. Underlying the seriousness with which the Commission is approaching the securitisation brief, together with the Green Paper was published a consultation on securitisation. This consultation, with a May 13 deadline, requests stakeholder views on the notion of a bifurcated approach to the regulation of securitisation similar to that which PCS has been advocating since its inception. In particular, the consultation explicitly addresses the possibility of […]

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16/02/2015

PCS files its response to the BCBS/IOSCO consultation on simple, transparent and comparable securitisations

PCS files its response to the BCBS/IOSCO consultation on simple, transparent and comparable securitisations. We view this work stream by the Basel Committee and IOSCO as a major and positive move towards a global approach to securitisation that is in line with our own analysis and the positions taken by the European stakeholders in the asset class, including many European policy makers. PCS very much hopes that this work will lead to a new global regulatory approach to securitisation that will help in the return of a strong worldwide securitisation market free from the build up of systemic risk that […]

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30/01/2015

IMF publishes a discussion note on securitisation

The IMF has just published a staff discussion note entitled "Securitization: The Road Ahead". This IMF report on securitisation is favourable to the return of a strong securitisation market with a larger non-bank investor base and makes a number of policy recommendations. PCS is also referred to as an institution setting standards for the market.

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23/01/2015

EBA publishes the responses to its consultation on simple, standardised and transparent securitisations

Following the closing of the consultation period, some of the responses to the EBA's consultation on simple, standardised and transparent securitisations can now be found on the authority's site. These responses came from a variety of sources, including of course PCS.

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16/01/2015

Delegated Acts for Solvency II adopted but the Parliament still has some questions

Upon the expiration of the deadline for objections on January 10th, the Solvency II delegated acts were adopted. These include, of course, the division of securitisations into two types and the calibrations that are now well known and still considered by many insurance companies as still too high. Of interest however is also the letter from the European Parliament to Commissioner Hill. In the letter, the Parliament asks for a speedy review of the calibrations for infrastructure investments. Although not immediately relevant to securitisation, this is a good sign nevertheless. With the EBA work being done on a definition of […]

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15/01/2015

PCS files its responses to the EBA consultation on simple, standardised and transparent securitisations

PCS filed yesterday its response to the EBA consultation on simple, standardised and transparent securitisations. This consultation marks a very strong and positive step towards the creation of a robust regulatory framework built around a definition of high quality securitisations. PCS welcomes the consultation and is supportive of the approach outlined by the EBA.

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15/12/2014

Finance Watch publishes a paper on securitisation – remains critical

Despite the enormous progress that has been made in the rehabilitation of high quality securitisation, Finance Watch today published a timely reminder that not everyone is convinced that a return of a safe and strong securitisation market will be beneficial to the European economy. Finance Watch’s position paper on securitisation although mentioning PCS and acknowledging some of the strengths of securitisation, demonstrates that those, like PCS, who believe in the value of this financing channel still have work to do in convincing skeptics and that political support for it must be earned and should not be taken for granted.

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11/12/2014

Busy day for securitisation: BCBS releases its revised securitisation framework

In a busy day for securitisation, the Basel Committee released today the new BCBS revised securitisation framework. The new Basel securitisation framework is the document setting out the proposed final capital rules for banks’ holdings of securitisation positions and is proposed to be implemented by January 2018. With the recent statement by the BCBS of the EU’s non-compliance with the Basel standards on the LCR, some have queried whether this new set of rules will be globally adopted within the timeframe proposed by the Basel Committee. In addition, the interaction between this final framework and the BCBS/IOSCO’s work stream whose consultative […]

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11/12/2014

Today the BCBS and IOSCO release a consultative document on 'simple, transparent and comparable' securitisations

As part of the workstream jointly set up earlier this year by the BCBS and IOSCO to look into high quality securitisation, a consultation paper on “simple, transparent and comparable” securitisation was released today. The paper sets out proposals for a principles based approach identifying quality securitisations. In a process that parallels the consultation of the EBA on simple, standardised and transparent securitisations and the ECB/Bank of England consultation on similar topics, this paper is a welcome globalisation of a debate which PCS believes needs to inform all future regulatory approaches to securitisation. The consultation period ends on February 13th, 2015.

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10/12/2014

ECOFIN asks for a securitisation framework to be developed by the summer 2015

Following its meeting today, the council of European finance ministers (ECOFIN) released a statement covering what it saw as the priorities for Europe. The statement specifically encouraged 'the Commission to develop, a dedicated EU framework for simple and transparent securitisations designed to further maximise consistency, transparency and legal certainty for all stakeholders in the market' and suggested a deadline for the development of such scheme of the summer of 2015. This is very encouraging and consistent with the PCS view that a definition of high quality securitisation should be expected well before the end of 2015. This would allow the […]

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19/11/2014

Updated Version 8 of the PCS Rulebook, PCS Eligibility Criteria and PCS Checklist now available

PCS has issued Version 8 of the PCS Rulebook, PCS Eligibility Criteria and PCS checklist. These documents together with blacklined versions of the PCS Rulebook and PCS Eligibility Criteria (comparing Version 8 with Version 7) can be found by clicking here. The main criteria changes are Auto fleet Leases as a new PCS asset class and amendments to arrears criteria for SME and Non-Auto Leases.

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