September 14, 2012 / 9:03 AM / 8 years ago

Dutch issuers gear up for structured finance transparency

LONDON, Sept 14 (IFR) - Dutch RMBS issuers are close to launching the Dutch Securitisation Association (DSA), which will see all the major Dutch RMBS originators sign up to standardised reporting, standard definitions of 200 terms, and prospectus structure.

The Dutch initiative comes at the end of a two-year process which has run alongside the ECB’s loan-level data project and the Prime Collateralized Securities labelling initiative.

Reports that the Dutch issuer community had threatened to boycott the ECB-backed European DataWarehouse (ED) were inaccurate, according to two people familiar with the discussions.

Dutch issuers declined to fund the ED project during its fundraising phase early on, and are concerned that the ECB-sponsored scheme is being overseen by a private company, rather than a membership association. However, the Dutch issuer community are negotiating with the ED and ECB to see if these concerns can be addressed.

The aims of the Dutch project are more modest than the ECB or PCS initiative. The idea has come from the Dutch issuer community, with the objective of safeguarding access to securitisation funding and improving the image of the product, rather than being an initiative led by a central bank.

Dutch RMBS meeting the DSA standards will not be formally certified, monitored or verified - instead, issuers will represent in their prospectuses that their deal information is correct and compliant with DSA standards, and post their data in the correct format to the website.

Enforcement is based on a “comply or explain” model, and it is hoped that market discipine will help to bring issuers into line. Deficiencies will be more obvious once issuers have their investor reports in standard format and directly comparable.

The information should also be more accessible than other transparency initiatives - rather than requesting a password from the issuer, as with the Bank of England loan-level data, the DSA will publish its information on a publicly available website.

This will collate new, more detailed investor reports, alongside the standardised prospectuses and definitions. Anyone, regardless of accreditation, should be able to access the information, which will be in a user-friendly format for databases and cashflow modelling.

Provisional members of the association, which should be legally incorporated from October 1, are ABN Amro, ING, Rabobank, AEGON, Delta Lloyd, SNS Bank, and NIBC. Affiliate members are WestlandUtrecht Bank, an ING subsidiary, and Obvion, a Rabobank subsidiary.

KPMG Nederlands has been leading the project, and has consulted investors and rating agencies about their requirements. The Association is searching for a director responsible for day-to-day operation of the standard, which should be formally launched by October 31.

So far the scheme only covers RMBS, but could be expanded to other securitisation asset classes.

The Dutch regulatory authorities are also said to be supportive of the initiative, though have not offered any specific regulatory concessions in exchange for successful operation of the scheme.

Fitch said it expects the standard of Dutch reporting, as measured by its five star grading system, to improve when the scheme is launched. (Reporting By Owen Sanderson)

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