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European Financial Services Round Table
 
Publication/Research Document

Finance industry launches PCS Securitisation label to revitalise market - PCS fact sheet
Overview

- PCS is a market-led initiative developed to apply a label to securitisation issues which meet specific eligibility criteria with the aim of increasing the funding of real economy assets through securitisation thereby supporting the recovery and future growth of the European economy.

- The PCS label is intended to be a simple way of communicating and identifying securitisations that meet predefined best practice standards with regard to quality, transparency and simplicity/standardisation. The aim of setting these standards is to increase the depth of the securitisation investor base so as to allow for an increase in primary issuance and improve secondary market liquidity.

- PCS is not intended to replace investor due diligence or credit ratings or to act as an alternative form of credit analysis. PCS eligibility is, however, limited to the most senior tranches in a securitisation capital structure.

- An independent, not-for-profit, organisation has been set up to develop, launch, promote and administer the PCS label. The PCS organisation will comprise the PCS Association which will own the label and the PCS Secretariat which will be responsible for day to day operations including label issuance and monitoring.

- PCS will be governed by an independent Board made up of a mix of senior non-industry professionals and senior financial services industry professionals.

- The PCS organisation will be a self-financing entity after an initial period of pre-funded operation.

- PCS will appoint a small panel of specialist firms with extensive experience in documentation review, audit and checking to assist it with verifying whether a securitisation satisfies the PCS eligibility criteria.

- PCS benefits from the support of large group of stakeholders including investors, public authority bodies, industry associations, Issuers and other securitisation industry participants. This diverse stakeholder group has developed PCS taking into account the views of a wide range of constituents from across Europe.