Significant Risk Transfer (SRT) Securitization Transactions

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SRT (Significant Risk Transfer)
Securitisation Transactions

What are Significant Risk Transfer (SRT) securitization transactions?

Significant Risk Transfer (SRT) securitization transactions are financial arrangements used by financial institutions globally to transfer the risk associated with assets and reducing capital requirements. The key feature of an SRT transaction is that the seller must demonstrate to regulators that it has effectively transferred the risks associated with the financial assets to the investors.

What are the benefits of SRT?

Workflow automation for an issuer / originator includes the ability to address:


  • Multi-source data ingestion
  • Multi-funding options and related reporting templates that support funding based upon eligibility criteria and cost of funds
  • Algorithmic pool selection to determine an optimum pool
  • Monthly settlement, determination calculations and reporting to lenders and investors
  • Payment directions and swap calculations
  • Accounting and finance via journal entries and bank reconciliations 
  • Regulatory reporting


Workflow automation in respect ABCP conduit administration includes:

  • Ingestion of seller reports and the scraping of information from these reports for data input purposes
  • Generation of CP issuance requests
  • Generation of seller invoices after taking into account cost of fundings
  • General journal entries to downstream accounting system

Case Study 1 - Auto finance issuer

A major auto finance originator managed its funding activities predominantly via securitization warehouses and term ABS issuances.   TAO Solutions was engaged to review existing funding and term issuance activities to reduce operational processing times as well as minimise operational risks, whilst maximising ROI and speed to progress to user acceptance testing and go-live production.


TAO Solutions was successful in introducing its software to materially reduce operational processing times across all business segments, including:



  • The ingestion, validation and normalisation of customer data and the ingestion of third party data feeds;
  • Automate warehouse operational funding to support daily funding needs involving numerous investors in the capital structure and related notices and reporting
  • Automate the pool selection process to select loans from multiple funding vehicles and determine portfolio compliance with the underlying transaction documents
  • End-user configurable transaction modelling and determination reporting for investors, trustees and regulators
  • Various management reports for risk< ALCO and compliance assessments
  • Rating Agencies feeds
  • Accounting journal entries, bank reconciliations and payment instructions 


The new global industry benchmark for securitization, structured finance and ESG software as a service solution catering for issuers, aggregators, lenders, ABCP conduits, trustees and regulators.


Multi-jurisdictional, asset class agnostic SaaS software solution addressing the complex requirements involving end-to-end administration and regulatory reporting requirements for the financial services industry.

Canada's mortgage funding and portfolio management software as a service solution built for issuers and aggregators.


Representing the de facto standard for mortgage securitization, structured finance and covered bond SaaS software solutions in Canada.

LeaseSpark is a cloud SaaS application that improves the efficiency of your daily equipment finance operations, making it easier to originate, administer and manage deals throughout their lifecycle.

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