65.The originator shall not provide any implicit support to investors in a securitisation transaction.

66.When a bank provides implicit support to a securitisation, it must hold capital against all of the underlying exposures associated with the securitisation transaction as if they had not been securitized. Additionally, the bank is not permitted to recognize in regulatory capital any gain on sale. Furthermore, the bank is required to disclose publicly (a) that it has provided non-contractual support and (b) the capital impact of doing so.

67.Where a securitisation transaction contains a clean-up call and the clean up call can be exercised by the originator in circumstances where exercise of the clean up call effectively provides credit enhancement, the clean up call shall be treated as implicit support and the concerned securitisation transaction will attract the above prescriptions.