BANK 4.6.7 Process of securitisation

(1) The process of a securitisation is:
(a) first, the origination of assets or credit risk;
(b) second, the transfer of the assets or credit risk; and
(c) third, the issuance of securities to investors.
(2) In a securitisation, the cash flow from the pool is used to make payments on obligations to at least 2 tranches or classes of investors (typically holders of debt securities), with each tranche or class being entitled to receive payments from the pool before or after another tranche or class of investors, so that the tranches or classes bear different levels of credit risk.
Inserted by QFCRA RM/2017-2 (as from 1st April 2017).