Regulatory
STS
Also known as: Simple Transparent Standardised, STS securitisation, STS securitization
status: draft
Simple, Transparent, and Standardised. An EU regulatory designation for securitizations that meet specific criteria for structure simplicity, disclosure, and underwriting standards. STS-compliant deals receive favorable capital treatment under CRR (Capital Requirements Regulation).
What to watch
STS qualification requires third-party verification and ongoing compliance monitoring. The benefits are real: lower capital charges for European bank and insurance investors. But the requirements are prescriptive (no active portfolio management, homogeneous pools, retention requirements). If you are structuring for European distribution, determine STS eligibility early since it affects deal economics for key buyers.