The American Securitisation Forum (“ASF”) has issued a set of recommended “minimum standards and best practices” for asset-backed securities (ABS) syndicates.
The standards are the second set the ASF has developed. The first was a monthly investor report template for multi-seller conduits in the asset-backed commercial paper sector issued in April, 2003.
“The focus of the ASF’s minimum standards and best practices recommendations is to improve the marketing and distribution of asset-backed securities by providing more uniformity across the syndicate community,” says Dwight Jenkins, Executive Director of the ASF. “Ultimately, investors will benefit from the consistency of deal information that these standards promote, and that is positive for the securitisation market in general.”
The recommendations cover the five stages of the syndication process – deal announcement, recommended price guidance, deal status, transaction launch, and transaction pricing – and include both “minimum standards” and “best practices.”
While adoption of ASF approved market standards and practices are voluntary for ASF members and non-members, the ASF hopes that these recommended minimum standards and best practices will be widely adopted. The ASF says its objective is to build a consensus around the minimum standards, with best practices serving as the goal to work towards.
Investors have asked for more uniformity across the syndicate community, and with widespread adoption of these practices, they would receive the same consistent information from all dealers on all deals. Following the initial publication of these standards, they will be revised as appropriate based on market feedback.
“The ASF is pleased to issue its second market standard, which will contribute to the improvement in the marketing and distribution of asset-backed securities,” says Vernon H.C. Wright, Chairman of the ASF and Chief Financial Officer of MBNA Corporation. “Ish McLaughlin (Director, Syndicate, Citigroup Global Markets) and Dan Stachel (Principal, State Street Global Advisors and Chair of the ASF Market Standards and Practices Committee) should be applauded for leading the task force in the development of these new standards.”