Regulatory Alerts2022-09-30
D10/2022 Criteria for Identifying Simple, Transparent and Comparable Term and Short-Term Securitisations
The Prudential Authority of the South African Reserve Bank has issued Directive D10/2022 to establish standardized criteria for identifying simple, transparent, and comparable (STC) term and short-term securitisations. Banks must apply differentiated regulatory capital treatments to STC-compliant exposures by verifying that structures meet the specific criteria outlined in Annexures A and B, while ensuring originators disclose necessary information and investors conduct independent compliance assessments. This framework reduces capital surcharges for lower-risk structures, enhances investor due diligence through improved transparency and comparability, and strengthens overall financial stability by mitigating risks associated with complex or opaque securitisation markets.