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IOSCO maps out securitization's path back to investor confidence

Nov 19 2012 Peter Elstob, Regulatory Intelligence

A combination of globally aligned "skin in the game" requirements, greater transparency, and consistent cross-border prudential treatment is the key to regaining investor confidence in securitization, according to the International Organization of Securities Commissions (IOSCO). In its final report (PDF) on "Global developments in securitization regulation", one of the strands of the Financial Stability Board's [FSB] work on the shadow banking sector, IOSCO put forward 10 recommendations on: Aligning investors and securitizers' incentives, "including where appropriate, through mandating retention of risk ['skin in the game'] in securitization products". Improving transparency and standardizing disclosure for securitization products. Closing gaps across jurisdictions in the prudential and accounting treatment of securitizations, as well as differences in the approach and terminology securities regulators employ. Encouraging more liquid national and international secondary

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