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ICMA joins industry effort to highlight importance of securitisation
10 October 2016 ICMA has joined seven other leading European trade associations representing investors, originators, issuers and other market participants in signing a paper highlighting the importance of securitisation for jobs and growth in Europe, and underlining their commitment to supporting a safe and sustainable market that serves the real economy. ICMA, led by an investor working group run by the Asset Management and Investors Council (AMIC), joins the Association for Financial Markets in Europe (AFME), the Dutch Securitisation Association (DSA), Eurofinas, the European Banking Federation (EBF), the European Fund and Asset Management Association (EFAMA), Leaseurope and Pensions Europe in signing the paper and make the following key points:
  • Securitisation can support SMEs and households in many different ways;
  • A revival of sound securitisation can help diversify risks, thereby making the financial system more stable;
  • A well-designed STS framework will deliver “simple”, “transparent” and “standardised” securitisations;
  • Transparency and disclosure standards are already robust– further requirements should build on existing infrastructure and be carefully calibrated;
  • The lessons of the crisis have been learned and reflected in EU regulations;
  • Investor due diligence is important, but unnecessary duplication should be avoided as it disincentivises investment;
  • Risk retention is important: the existing rules ensure alignment of interests and sufficient “skin in the game” for those who securitise;
  • Tranching is common across all debt markets and is an essential feature of the securitisation technique to meet investors’ needs.
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