The Australian Prudential Regulation Authority's latest draft set of standards for the securitisation market has been greeted by the industry as clearer and more flexible.APRA has issued a discussion paper detailing a number of revisions to proposed prudential rules for securitisation that it issued in April last year.APRA's main goal is to simplify securitisation structures. It said one of the lessons of the financial crisis was that securitisation structures had become too complex and this had introduced risks into the market.In last year's draft APRA said it would allow only two classes of securities (A notes and B notes), which was at odds with industry practice. Issuers would be required to "have skin in the game" via a risk retention rule.It said it would permit revolving securitisation facilities, or mastertrusts, which would create multiple series secured by the same pool of mortgages or other receivables.It also foreshadowed changes to requirements for capital relief and changes to the treatment of warehouses.The revisions released yesterday dispense with the risk retention requirement, allow more flexibility in funding-only securitisation, and remove explicit references to warehouse arrangements.Since APRA's first draft came out last year, the Basel Committee released to its own securitisation rule changes. APRA has incorporated some of these changes into the latest draft, mainly dealing with the determination of regulatory capital requirements.Australian Securitisation Forum chief executive Chris Dalton said that in a number of areas APRA had moved away from a rules-based approach to a more principles-based approach.He said this was evident in its approach to the use of warehouses, the treatment of small issuers, such as mutuals, and in the rules governing mastertrusts.On the issue of skin-in-the-game, APRA said it received a number of submissions arguing that a rule that differed from requirements overseas would make offshore issuance more complex and defeat the regulator's aim of creating a simplified framework.On the issue of warehousing, APRA's original proposal was that if assets remain in a warehouse after one year the ADI providing the warehouse funding would incur a capital charge.Submissions argued that small ADIs require more than one year to aggregate a pool of sufficient size to undertake a term securitisation.APRA said it would remove all references to warehouses from the standard and focus on the credit risk transfer.