On 9 April 2021, the STS rules for synthetic securitisations came into force. This creates the greatest possible equality of treatment with true sale securitisations. Consequently, STS Verification International GmbH (SVI) has now received an extension of its authorisation for STS verification of synthetic balance sheet securitisations as an independent third party verification agent.
This authorisation, granted by BaFin as the competent supervisory authority on 25 June 2021, is valid EU-wide and with immediate effect. Banks in the EU thus have the possibility to have the compliance with the STS rules and regulations verified by the SVI when carrying out synthetic balance sheet securitisations. This significantly supports a consistent and uniform application of the STS criteria and increases legal certainty.
SVI thus completes its range of services as a reliable partner for issuers, arrangers and sponsor banks in the European securitisation market. Since March 2019, it has verified over 90 securitisations in more than 15 countries and in 7 different asset classes. Additional services include CRR and LCR assessments of STS securitisations.
Outlook and appreciation
TSI welcomes the approval for STS verification of synthetic balance sheet securitisations as a further building block towards the completion of the EU Securitisation Regulation. Especially in the current phase of uncertainty with not exactly foreseeable effects of the Corona pandemic on the real economy, synthetic STS securitisations provide banks with an important instrument for risk management and capital relief. Banks can thus significantly improve their capacity to lend to businesses and consumers and make an important contribution to economic recovery.
All detailed information on the approval and verification can be found here