Steps taken by conduit sponsors to improve transparency in ABCP won’t be enough to achieve full disclosure on underlying assets and originators, Fitch Ratings said.

Historically seen as a "black box", ABCP conduits and in particular multi-seller programs have tended to provide a limited amount of detail on the underlying assets in the program and are not obliged to reveal the underlying transactions, securities and assets to which they provide funding mainly due to confidentiality issues.

However, given the difficulties in the ABCP markets over the past two years, there has been a concerted move toward more transparency by many conduit sponsors. The heightened transparency is aimed at increasing the amount of aggregate program and collateral performance information for investors in their monthly reports.

Fitch said that even if full transparency was given, it is unclear how this would be treated by investors in the context of marking exposures and taking into account other structural mechanics of the program.

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