What the label means
The EU introduced the STS framework in the Securitisation Regulation (EU) 2017/2402. The UK kept a version of it after leaving the EU and now has its own rules under the Securitisation Regulations 2024 and the FCA's Securitisation sourcebook (SECN), in force since 1 November 2024. The criteria cover, among other things, how the loans are selected and transferred, how the deal is structured and what information investors get.
The FCA describes the aim as making it easier for investors to understand and assess the risks of a securitisation, and says positions in STS securitisations can attract preferential capital treatment under the Capital Requirements Regulation. This is often cited as a main reason lenders seek the label: bank and other regulated investors can hold STS notes more cheaply, which can widen the investor base.
The label is not a rating and says nothing directly about how likely the loans are to be repaid.
EU: the ESMA STS Register
Under Article 27 of the EU regulation, the originator and sponsor jointly notify the European Securities and Markets Authority (ESMA) when a securitisation meets the STS requirements. ESMA lists notified deals and updates the list when a deal no longer counts as STS. Separate criteria apply to traditional (non-ABCP) securitisations, to asset-backed commercial paper (ABCP) and, since 2021, to on-balance-sheet synthetic securitisations.
Official list: ESMA STS Register (background on ESMA's securitisation page).
UK: the FCA STS list
For UK STS, the originator and sponsor must be established in the UK and notify the FCA, which keeps a list of notified securitisations. Since 30 June 2026, UK law treats securitisations, other than synthetic ones, that count as STS in the EU, Iceland, Liechtenstein or Norway as equivalent under the UK's overseas STS regime (SI 2026/550). This replaced a time-limited recognition.
Official information and the list: FCA securitisation page.
What STS verifiers do
A third-party verifier is a firm authorised by a regulator to assess whether a deal meets the STS criteria. In the EU, verifiers are authorised by the national supervisor under Article 28 of the regulation. In the UK, they are authorised by the FCA and appear on its Financial Services Register (FCA page on third-party verifiers). Using a verifier is optional, and the FCA notes that originators, sponsors and securitisation vehicles remain liable for their obligations. In practice many STS deals, public and private, use one, and verifiers' published transaction lists are a useful public source; the tracker uses them to confirm deal sizes and dates where lenders publish no release.
Why it matters for fintech lenders
For a lender moving from a warehouse to term securitisation, STS status is one of the choices in setting up a deal. It adds work, such as meeting the criteria and preparing the notification, and in return can attract investors who benefit from the capital treatment. Whether it is worth it depends on the deal and the investors, and practice varies.