European paper issued on improving securitisation transparency

Ten new initiatives aim to increase transparency in the securitisation markets

LONDON – Nine European and global trade associations today released Ten Industry Initiatives to Increase Transparency in the European Securitisation Markets, in response to the call from the European Council of Finance Ministers’ (Ecofin) in its Roadmap published in October 2007.

The nine associations are the Commercial Mortgage Securities Association, European Association of Co-operative Banks, European Association of Public Banks and Funding Agencies, European Banking Federation, European Savings Banks Group, European Securitisation Forum, International Capital Market Association, London Investment Banking Association and the Securities Industry and Financial Markets Association.

The 10 initiatives are broad in scope. The first two are in direct response to the Ecofin Roadmap, and include draft industry good practice guidelines on securitisation disclosures under Pillar III of the Capital Requirements Directive (CRD), and the creation of a new industry quarterly securitisation data report, which provides comprehensive, frequent and relevant statistical data on EU and US securitisation markets.

But the industry initiatives go beyond the transparency requests specifically listed in the Ecofin Roadmap, with eight additional issuer- and investor-focused initiatives designed to standardise issuer disclosure practices, broaden and facilitate investor access to transaction information, enhance usability and comparability of information, and strengthen investor good practice.

While all of the associations are committed to improving transparency and have co-ordinated their efforts, they have separate memberships with differing expertise. So different associations have led each initiative and take separate responsibility for each initiative’s implementation. The associations are committed to providing a robust framework to deliver greater transparency and contribute to increased long-term investor confidence in the European and global securitisation market.

These initiatives are being co-ordinated on a global basis with other industry groups as much as possible, and are also consistent with recommendations of the Financial Stability Forum and the International Organisation of Securities Commissions on transparency.

The associations expect to continue to brief the European Commission on the status of implementation, and welcome the EC’s and others’ input to further refine and develop these initiatives.