Two key regulations governing securitizations - Basel II and International Accounting Standard (IAS) 39 - are expected, in their final format, to most likely redefine structured finance in terms of its role, deal structures, investor base and not least of all, volume, analysts say.

"They will emphasize the need for the development of specialized and sophisticated investors for subordinated tranches and equity pieces," said Alexander Batcharov at Merrill Lynch. "The Bank of International Settlements (BIS) will potentially alter banks' motivations as both issuers and investors for cash and synthetic securitization. As the above proposals take final form, market participants should take note and start positioning themselves for the future altered regulatory environment - hence, the effects on the structured finance market will gradually become palpable."

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