Regulatory Frameworks For Securitization Training Course: Basel Iii, Ifrs 9, And Global Standards

In the post-2008 financial landscape, a deep and practical understanding of regulatory frameworks is no longer an optional skill but a critical necessity for any professional involved in securitization. The introduction of robust standards like Basel III and the sweeping changes brought by IFRS 9 have fundamentally reshaped how financial institutions structure, manage, and account for securitized assets. This intensive training course provides a definitive guide to these complex rules, equipping participants with the knowledge to ensure compliance, mitigate risk, and strategically navigate the evolving global regulatory environment.

This 10-day program is meticulously designed to bridge the gap between regulatory theory and practical application. Participants will not only learn the intricate details of capital adequacy under Basel III and the new impairment models of IFRS 9, but they will also gain hands-on expertise through case studies and practical exercises. We will explore how these global standards interact, their impact on deal structuring and risk assessment, and the strategic implications for financial institutions. This is a must-attend program for any professional seeking to maintain a competitive edge and ensure the resilience of their securitization operations.

Duration

10 days

Target Audience

• Credit risk and portfolio managers
• Professionals in structured finance and securitization
• Regulatory and compliance officers
• Accountants and financial reporting specialists
• Investment bankers and underwriters
• Legal professionals specializing in financial law
• Auditors and consultants for financial institutions
• Senior management responsible for capital planning

Objectives

• Master the key principles of Basel III and its impact on securitization.
• Understand the core requirements of IFRS 9 related to financial instruments.
• Analyze the regulatory capital treatment of securitization exposures.
• Evaluate the IFRS 9 impairment model and its application to securitized assets.
• Compare and contrast global regulatory standards for securitization.
• Identify key compliance challenges and best practices.
• Develop a framework for integrating regulatory requirements into deal structuring.
• Assess the impact of these rules on liquidity and risk management.
• Understand the strategic implications for banks and other institutions.

Course Modules

Module 1: The Post-Crisis Regulatory Landscape

• A review of the 2008 financial crisis and its drivers.
• The regulatory response and the birth of new standards.
• The core principles behind Basel III and IFRS 9.
• An overview of the global regulatory bodies and their roles.
• The push for greater transparency and risk management.

Module 2: Introduction to Basel III

• The three pillars of Basel III: capital, supervision, and disclosure.
• The definition of capital and its components.
• The new standards for capital adequacy ratios.
• The concept of a capital conservation buffer and countercyclical buffer.
• The importance of leverage ratios.

Module 3: Basel III and Securitization Exposures

• The regulatory framework for securitization under Basel III.
• The hierarchy of approaches for calculating risk-weighted assets.
• The use of external ratings-based and standardized approaches.
• Understanding the concept of a Simple, Transparent, and Comparable (STC) deal.
• The regulatory treatment of resecuritization exposures.

Module 4: Basel III: Liquidity and Funding

• The liquidity coverage ratio (LCR) and its purpose.
• The net stable funding ratio (NSFR) and its components.
• How securitization deals impact a bank’s liquidity profile.
• The importance of funding diversification.
• Managing liquidity risk in a securitized portfolio.

Module 5: Introduction to IFRS 9

• The three key areas of IFRS 9: classification and measurement, impairment, and hedge accounting.
• The shift from a “incurred loss” to an “expected loss” model.
• The business model and cash flow characteristics tests.
• The impact on financial instrument valuation.
• The different categories for financial assets.

Module 6: IFRS 9 and Securitization Accounting

• The classification and measurement of securitized tranches.
• Determining the appropriate accounting category.
• How IFRS 9 impacts the derecognition of assets.
• The concept of a “pass-through” and its accounting implications.
• The challenges of fair value measurement.

Module 7: The IFRS 9 Expected Credit Loss (ECL) Model

• A deep dive into the three-stage ECL impairment model.
• How to calculate the 12-month and lifetime expected credit loss.
• The use of forward-looking information in the model.
• Applying the ECL model to the underlying collateral of a deal.
• Practical examples of ECL calculation for a securitized portfolio.

Module 8: Global Regulatory Comparisons

• A comparison of Basel III and the European Union’s CRR.
• An overview of US regulatory standards for securitization.
• The role of local regulators in implementing global rules.
• Comparing IFRS 9 with US GAAP standards.
• The challenge of harmonizing global regulations.

Module 9: The Role of Credit Rating Agencies

• How regulatory changes affect rating agency methodologies.
• The use of ratings in the regulatory capital calculation.
• The shift away from over-reliance on ratings.
• The new standards for rating agency oversight.
• The importance of independent risk assessment.

Module 10: Governance and Regulatory Reporting

• The importance of strong internal governance and controls.
• Key regulatory reporting requirements for securitization deals.
• The role of data quality and reporting systems.
• Preparing for regulatory audits and stress tests.
• Best practices for communicating with regulators.

Module 11: Deal Structuring and Compliance

• How regulations influence the structure of a new deal.
• The use of legal opinions to ensure compliance.
• Designing deals to be capital and liquidity efficient.
• The strategic implications for banks’ balance sheets.
• The role of risk professionals in deal design.

Module 12: Advanced Topics in Basel III and Securitization

• The detailed framework for market risk.
• The new standardized approach for counterparty credit risk (SA-CCR).
• The Fundamental Review of the Trading Book (FRTB).
• How these rules impact securitization deals with derivatives.
• Capital relief and its limitations.

Module 13: Advanced Topics in IFRS 9

• A detailed review of hedge accounting principles.
• The accounting for modifications and derecognition of loans.
• The interaction between IFRS 9 and other standards.
• The challenge of valuing complex financial instruments.
• Recent interpretations and guidance from regulators.

Module 14: Practical Workshop: Case Studies

• Analyzing a real-world securitization prospectus from a regulatory perspective.
• Participants will identify key Basel III and IFRS 9 challenges.
• A team-based exercise in performing a regulatory capital calculation.
• Drafting a memo on the key compliance risks of the deal.
• Discussing strategic recommendations for the deal’s structure.

Module 15: Capstone: The Future of Regulation

• The direction of future regulatory reform.
• The impact of emerging risks like climate change.
• The role of technology in automating compliance.
• A discussion on the long-term strategic implications for the industry.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.