Shelf registration is a type of SEC registration that allows an issuer to register a new issue of securities without having to sell the entire issue at once. The issuer can instead sell portions of the issue over a three-year period without re-registering the security or incurring penalties.
Here are some applications of shelf registration in securitisation:
- To increase flexibility: Shelf registration can help issuers to increase their flexibility. This is because issuers can sell securities when market conditions are favourable, without having to go through the full registration process each time.
- To save time and money: Shelf registration can also help issuers to save time and money. This is because issuers do not have to go through the full registration process each time they sell securities.
- To meet demand: Shelf registration can help issuers to meet demand. This is because issuers can sell securities as soon as they are needed, without having to wait for the full registration process to be completed.
Here are some examples of how shelf registration is used in securitisation:
- Mortgage-backed securities: Shelf registration is often used in mortgage-backed securities (MBS). This is because MBS are typically issued in large amounts, and shelf registration can help issuers to meet demand for MBS.
- Credit card securitizations: Shelf registration is also often used in credit card securitizations. This is because credit card securitizations are also typically issued in large amounts, and shelf registration can help issuers to meet demand for credit card securitizations.