RBA Market Advice – Update to Eligible Security Criteria for Self-securitisations
The Reserve Bank of Australia (RBA) has made changes to its Eligibility Criteria for self-securitisations.
New criteria for self-securitisations
Following two rounds of consultation with industry, the RBA has published new criteria for self-securitisations. These changes will require, among other things, any transaction document changes needed to meet the additional criteria to be completed by 31 March 2025 and ADI sponsors to complete and submit their first annual certificate to the RBA by 31 March 2025. From 1 April 2025, applications for securities issued from new self-securitisation trusts to become repo eligible will also require completion of a certificate.
Other new criteria for self-securitisations
In addition, the RBA is making two further changes to its criteria for self-securitisations.
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Remit to the collections account at least weekly
Principal and interest collections must be remitted to the issuer’s collections account at least weekly. This requirement applies to any self-securitisation that the RBA first approves for repo eligibility after 31 March 2025. Existing self-securitisations (i.e. self-securitisations first approved by the RBA for repo eligibility on or before 31 March 2025) that do not meet this criteria after 31 March 2025 will incur a higher margin ratio (see Margin Ratios). -
BBSW fallback language
From 1 April 2025, all self-securitisations, regardless of the date of issue, will be required to include at least one robust and reasonable and fair fallback in order to be eligible.
If any self-securitisation transaction document changes are required to meet these new requirements, please adhere to the RBA’s ABS Maintenance Requirements (including the minimum notice period of 20 day business days).
For further information please contact the Eligible Securities Team at eligible_securities@rba.gov.au.
Risk & Compliance Department
Reserve Bank of Australia
28 March 2024