Powered by MOMENTUM MEDIA
subscribe to our newsletter

APRA to simplify mortgage securitisation rules

The prudential regulator has revealed its plan to revise the prudential requirements by establishing a simplified framework.

APRA yesterday released a draft Prudential Standard APS 120 Securitisation (APS 120), which takes into account global reform initiatives and the lessons learned from the global financial crisis.

“One of these lessons was that securitisation structures had become excessively complex and opaque, and that prudential regulation of securitisation had become similarly complex,” the regulator said in a statement.

APRA first consulted on initiatives to simplify its prudential framework for securitisation in April 2014. Following consideration of the issues raised in submissions, APRA has amended its proposals in some areas.

The amended proposals include dispensing with a credit risk retention or ‘skin-in-the-game’ requirement, allowing for more flexibility in funding-only securitisation, and removing explicit references to warehouse arrangements in the prudential framework.

Advertisement
Advertisement

PROMOTED CONTENT


APRA said these amended proposals are expected to assist Australian banks to further strengthen their funding profile and provide clarity for banks that undertake securitisation for capital benefits.

“In December 2014, the Basel Committee on Banking Supervision (Basel Committee) released its updated securitisation framework (Basel III securitisation framework),” APRA said.

“The changes aim to enhance the Basel Committee’s existing securitisation framework and to strengthen regulatory capital standards.”

APRA’s latest proposals incorporate the new Basel III securitisation framework, with appropriate adjustments to reflect the Australian context and APRA’s objectives, and will be applicable equally to all Australian banks.

Subject to consultation on this discussion paper and draft prudential standard, APRA proposes to implement these changes in line with the Basel Committee’s effective date of 1 January 2018.

[Related: Mortgage group announces securitisation plans]

APRA to simplify mortgage securitisation rules
mortgagebusiness

Latest News

The chairman of the financial services regulator has resigned from his position, effective immediately. ...

Refinancing settlements for the first nine months of the calendar year 2020 are up 27 per cent on last year’s volumes, having peaked in Ju...

The Tasmanian-based lender has seen a 43 per cent rise in settlements in the first quarter of the financial year, driven by strong demand fr...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Victoria’s surprising appetite for new homes

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.