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The European Securitisation Forum (ESF), an affiliate of the Securities Industry and Financial Markets Association (SIFMA), today released its exposure draft of Collateralised Debt Obligations (CDOs) Data File Format. The ESF is recommending a standardised format for data files related to the performance of CDO transactions. These data files are disseminated on a regular basis by trustees to investors and other interested parties.
SIFMA in the U.S. has already issued a CDO Data File Format which was released on 31 March 2007. The ESF has amended this format to comply with European cash and synthetic transactions. There will be a three-month period for the public to provide comment. Using this feedback the ESF and SIFMA will then create a common standardised data file format suitable for European and US CDO compliance.
A key benefit of the recommended standardised format, as laid out in the exposure draft, is it will allow market participants to process the vast amounts of data that are provided in CDO transactions reports more quickly and efficiently. In addition, standardisation will allow for better consistency of information. The guidelines are an important step in achieving improved disclosure and accessibility for CDOs post-issuance.
“This is an important standardisation effort for the European CDO market with many benefits and we are working to make sure that there will be widespread usage of the guidelines once issued for new deals,” said Fritz Thomas, managing director at Deutsche Bank and co-chair of the ESF’s CDO Committee.
Rick Watson, head of ESF, added, “The industry is actively working to continue improving transparency. This project is one of the various initiatives announced in September this year to help improve current market conditions. CDOs can provide significant benefits to a wide swathe of society from consumers through to governments, however they are complex instruments. Adoption of a standardised data file format across the industry will enable investors, rating agencies, regulators and other market participants to compare CDO deals on an apples-for-apples basis, improving the current surveillance and analysis processes.”
To read the full Exposure Draft of ESF Standardised CDO Data File please click on www.europeansecuritisation.com.
