RBA fosters better RMBS disclosure

Issuers of residential mortgage-backed securities will have to provide more detailed information about their transactions and present it in a standard format, following the introduction of new RMBS disclosure requirements.

Announcing the new requirements yesterday, Reserve Bank assistant governor Guy Debelle said greater transparency would facilitate an improvement in market conditions.

Speaking at the Australian Securitisation Forum annual conference in Sydney, Debelle said: "One objective for improving transparency is to ensure that investors, other market participants and regulators all have access to relevant information in order to monitor risk.

"Another aim is to improve document standardisation, which can help stimulate liquidity in securitisation markets."

Debelle said that there was no current RMBS reporting standard and, as a result, reporting varied among issuers, and available data was held in a number of locations.

Issuers will have to provide more "anonymised" loan-level data and more transaction-related data.

Examples of loan-level data include property location, borrower payment frequencies and interest-rate types that apply to the loans and loan balances.

Examples of transaction-related data include counter-parties involved in the securitisation, and details of any enhancement and support facilities.

The RBA has issued reporting templates on its website and has invited comment. Next year it will issue similar requirements for other types of asset-backed securities.

The industry is already working towards a solution that is likely to meet many of the RBA's goals.

Perpetual Corporate Trust and Oliver Wyman have backed a service developed by Morgij Analytics.

MARQ Services, aims to collate much more detailed - and much more comparable - information on home loan pools supporting RMBS bonds than is presently available (mainly from Perpetual). MARQ will also present this data in a more accessible way.