The Australian Prudential Regulation Authority has completed its revision of the prudential rules for asset securitisation and has released the final revised version of the standard, APS 120.APRA set out to revise the standard in the wake of the financial crisis, saying one of the lessons of the crisis was that securitisation had become excessively complex.The revision recognises the distinction between securitisation undertaken to seek capital relief and securitisation as a source of funding. It has set out to provide more flexible arrangements where the securitisation is undertaken for funding.It includes more conservative regulatory capital requirements for some types of securitisation exposures. "The financial crisis highlighted that the current low risk weights on some highly-rated securitisation exposures and some complex securitisation were insufficient," it said.APRA held its ground on elevated capital requirements and the end of the use of "advanced" models.One important concession to the industry is that warehouse arrangements, which small institutions use as part of the securitisation programs, may still qualify for regulatory capital relief.The new standard will take effect from January 1 next year.The regulator championed wider use of credit ratings from external credit ratings agencies to support modelling. Submissions in response to earlier draft proposals commented that APRA's proposal would "increase systemic reliance on external ratings and reduce the incentives to improve risk management."Enthusiasm for the status quo did not alter APRA's analysis. ADIs, it said, "may use the standardised approach if they do not wish to obtain an external credit rating."APRA concluded that "capital differences are not large for the most common exposures (such as prime, mortgage-backed securities).""Considering the operational burden of maintaining the advanced approaches, APRA has determined not to include the advanced modelling approaches in the securitisation framework."