STS Criterion 25. External verification of the sample
External verification of the sample 
A sample of the underlying exposures should be subject to external verification prior to closing by an appropriate and independent party, including verification that the underlying exposures meet the criteria determining eligibility for the credit protection under the credit protection agreement.
In synthetic securitisation compliance with contractual eligibility criteria determine the validity and therefore the effectiveness of the credit protection. From a transparency perspective it is crucial to ensure that any potential for disputes over the validity of the credit protection is minimised during the life of the transaction. For this reason, in the case of synthetic securitisation the audit prior to issuance should specifically cover eligibility conditions and should be carried out with a confidence level of at least 99%.
Issues and Challenges
- EBA STS Framework for Synthetic Securitisation, EBA/DP/2019/01