FINANCIAL INDUSTRY TRADE ASSOCIATIONS UNVEIL TRANSPARENCY INITIATIVES

Posted July 2, 2008

LONDON – Nine European and global trade associations have jointly issued “Ten Industry Initiatives to Increase Transparency in the European Securitisation Markets” in response to a call by the European Council of Finance Ministers in October 2007 that the industry should enhance transparency for investors, markets and regulators by mid-2008.

The associations had first responded in February, telling the European Commission they would deliver such a statement about how to increase transparency. The participating 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 detailed include good practice guidelines for securitization disclosures under Pillar 3 of the Capital Requirements Directive (CRD), and creation of a quarterly securitization data report of comprehensive, frequent and relevant statistical data on EU and US securitization markets. Initiatives also include:

§         Finalized ABCP (Asset-Backed Commercial Paper) Issuer Disclosure Code of Conduct;

§     Development of draft RMBS (Residential Mortgage-Backed Securities) and CMBS (Commercial Mortgage-Backed Securities) Issuer Transparency and Disclosure Principles;

§         Measures to enable further opening of access to transaction information;

§         Development of Industry Data Portals to create centralized access to prospectuses and investor reports;

§         New ESF (European Securitisation Forum) RMBS and CDO (Collateralized Debt Obligations) Issuer/Manager website directory;

§         Establishment of globally coordinated task forces to improve standardization and granularity of RMBS and CMBS reporting templates;

§         Development of standardized definitions to enhance comparability of terms in a global investor marketplace; and

§         Development of investor principles for credit assessment and valuations.