# Securitization Regulation Checker

> Source: https://bryter.com/use-cases/securitization-regulation-checker/

A Securitization Regulation Checker is designed to guide the user through the complex STS requirements to assess whether STS treatment applies to a transaction.

#### Background

On January 17, 2018, two EU Regulations establishing a new framework for European securitization entered into force.  

[Regulation (EU) 2017/2402 (the Securitization Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32017R2402) introduces a new framework for STS securitizations and [Regulation (EU) 2017/2401 (the securitization Prudential Regulation)](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32017R2401) sets out the framework under which certain institutional investors benefit from favorable regulatory capital treatment for STS securitizations.  

#### Challenges determining STS eligibility

[Assessing the eligibility of a transaction](https://www.nortonrosefulbright.com/en/knowledge/resources-and-tools/capital-markets-union/securitisation/sts-securitisation-practical-guide) under these regulations and submitting the paperwork to ESMA involves complex and time-consuming processes. These constrain both parties when submitting information, as well as the officiating authority’s resources. 

#### **Check compliance with Securitization Regulation**

First, each securitization needs to comply with the Securitization Regulation, in terms of transparency, due diligence, and risk retention overall requirements.

#### **Assess STS eligibility criteria**

Next, parties need to determine whether the STS eligibility requirement is met. There are various requirements in this regard, from ensuring that underlying assets meet predetermined, unambiguous and clearly documented eligibility criteria, and that there are exposures with defined periodic payment streams, to currency and interest rate risk being hedged.

#### **Notify the regulators and ESMA**

Once the STS requirements are assessed, parties need to notify the regulators and ESMA, in some cases providing third party certification, which may not always be substantial enough to determine the eligibility. 

#### **Automatically assess eligibility requirements** 

A Securitization Regulation Checker makes the assessment and submission processes much faster and more transparent as users are guided through an interactive questionnaire that quickly provides eligibility criteria information and removes the need for manual or guesswork. 

Our tool supports [data privacy automation](https://bryter.com/team/data-privacy-and-security/), by automatically assessing the eligibility criteria and required supporting forms and documentation, while checking provided user information against financial data sources to streamline the final eligibility assessment.  

A Securitization Regulation Checker can be integrated with financial databases to verify information and can be embedded in any client portal or website. 

Leveraging BRYTER’s [no-code app builder](https://bryter.com/applications/no-code-app-builder/), the tool provides an individual eligibility score for each assessment against custom criteria and auto-generates reports to track and process any identified red flags.

To see how BRYTER can be used to create your own [workflow automation](https://bryter.com/trends/workflow-automation-for-legal-operations/) tools, [book a demo](https://bryter.com/get-demo/) with one of our experts. Otherwise, read our [No-Code](https://bryter.com/trends/what-is-no-code/) and [Legal-Operations](https://bryter.com/trends/what-is-legal-operations/) guides to find out how to streamline your processes.