In a recent speech Charles Littrell, Executive General Manager of APRA gave a progress report on a new APS 120 for securitisation.
He explained the outstanding issues and the reasons for delay (including waiting for the Financial System Inquiry Report).
” I would hope that APRA will complete a new APS 120 during calendar 2015, with some transitional provisions. I expect that we will propose APRA’s typical approach to transition, which can be summarised as:
new transactions comply with the reformed rules from issue date;
older transactions are either run off, closed out, or restructured as quickly as is consistent with reasonable costs; and
no permanent grandfathering applies.
If past experience holds, the transition of legacy transactions will require two to three years from the effective date of the new APS 120. I note that many extant transactions may in fact comply with the reformed prudential standard, particularly if they are funding-only amortising structures.”
