Securitisation saves investors money

Securitisations usually do not need to be supervised by (or bear the cost of preparing detailed reports for) financial regulators, and also they do not need to appoint (or pay the fees of) a regulated manager. Being unregulated makes Securitisations much less expensive to set up and run.

There also other ways Securitisation can save costs for investors:

Save time and money on due diligence and regulatory checks:

For many investments which do not accept investments via ISIN, intensive checks (including anti-money-laundering and anti-terrorist financing checks) need to be done on the investors, who have to provide lots of documents and certificates confirming their identity and place of residence and the source of the invested money and so on. Even more documents and certifications are required if the investors are investing through an entity they own like a company or limited partnership. This can take up a lot of time and expense, both for the investors and ones doing the checks.

By using Securitisation, the managers of the underlying asset only need to do checks on the Securitisation entity. This saves time and costs, because the Securitisation entity anyway maintains standard and up-to-date "onboarding" pack, and the managers of the underlying assets are familiar with the format and can check it quickly.

The Securitisation can have an ISIN (International Security Identification Number) which means the investors' bank is the "nominee" investor and the Securitisation can rely on the checks the bank has to do on the investors.

Invest directly (not via ISIN) into underlying assets – lower cost

Many investment opportunities insist that ordinary investors invest via ISIN, and only accept direct (not via ISIN) investments from investors which are larger or easier to perform checks on, such as Securitisations.

Investing directly is cheaper than investing via ISIN except for small amounts, because the cost of processing investment documentation does not depend on the amount invested, whereas brokerage and custodian fees for investing via ISIN are generally a percentage of the investment.

Investing directly