The European Securitization Forum last week issued their recently updated standardized reporting fields and definitions guidelines for European residential mortgage-backed transactions. The guidelines have been created to improve the efficiency, transparency and valuation of RMBS reporting across the secondary markets in Europe by standardizing key industry terms.
Last week's publication of the new reporting standards follows the exposure draft of the ESF's reporting standards published in January 2006. The new RMBS reporting standards document contains 86 defined fields across four sections: security level data, collateral level data, loan level data and transaction report contact information.
Compliance with the ESF fields and guidelines is on a voluntary basis but the ESF said it strongly encourages all market participants to follow them. The fields and definitions will be reviewed and updated as necessary going forward. The ESF said it planned to have the new reporting standards document translated into the major European languages and supported by a series of workshops across Europe. The first of these workshops was scheduled for May 18 in London.
At the Venice securitization conference in April, Marco Angheben, associate director of the ESF, led a presentation on the new RMBS reporting standards. Angheben said that while European standards of reporting in structured finance had improved significantly in recent years, various reporting differences still remained among European jurisdictions as well as the U.S. These new standards support greater harmonization and standardization of RMBS reporting standards and also respond to the challenges presented by regulation AB in the U.S. by reinstating data pool in RMBS reports. These will also emphasize the importance of timely and regular post-issuance reporting and will provide first-time issuers with a clear blueprint to the largest asset class in European securitization.
"Consistency of post-issuance information will make it easier for investors, rating agencies and regulators to compare not only credit performance, but also to prepare and compare market valuations for those that are required to mark positions to market," said Ray Wyer, head of securitization at the Bank of Ireland and member of the ESF's investors committee.
The ESF said that they plan to introduce the fields and definitions document concept across other asset classes, including credit cards and auto loans.
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