Joint Forum Releases Report on Special Purpose Entities
The Joint Forum has released the final version of its paper entitled Report on
Special Purpose Entities.
This paper serves two broad objectives. First, it provides background on the variety of special purpose entities (SPEs) found across the financial sectors, the motivations of market participants to make use of these structures, and risk management issues that arise from their use. Second, it suggests policy implications and issues for consideration by market participants and the supervisory community.
John Dugan, chair of the Joint Forum and comptroller of the currency in the
US, said: “This paper significantly adds to the understanding of the use of these vehicles, both on how they are structured and operate and on how risk is transferred. This work will serve to inform supervisors and other market participants of the benefits and risks associated with use of SPEs. Policymakers can use this analysis for important contextual background to help advance the ongoing discussions on updating the regulatory and supervisory landscape for structured finance transactions and securitisation markets.”