EAA Frequently Asked Questions

There is significant interest in the EAA and its aims and objectives from potential new members and other stakeholders. These FAQs are designed to answer the most common questions we receive.

Assessment for EAA membership and award of the EAA AVM Label

1) How many companies can be certified in each country?

There is no limit on the number of companies per country to become a member in the EAA. The assessment is done purely on the basis of whether the AVM of an applicant fulfils the requirements. The nationality of an applicant is not a criterion.

2) How can an AVM provider apply for membership of the EAA to be certified to use the EAA label?

Any provider of an AVM can apply to the EAA for membership to be certified to use the EAA label by indicating their interest in membership to the EAA Secretariat.

3) What does the application procedure entail?

Membership of the EAA is granted to new members solely on the basis of the result of the assessment procedure [Hyperlink to key requirements] as to whether an applicant’s AVM fulfils the very high technical requirements set by and fully adhered to by all EAA members. If the assessment is successful membership is granted and the new member’s AVM is certified to use the EAA label.

4) Who undertakes the assessment of an applicant’s AVM?

The assessment is done internally by the Secretary of the EAA. All AVMs are assessed to a standard set of criteria that are designed to ensure that AVM outputs are robust, consistent, reliable and comparable across jurisdictions. This benchmark of quality and performance is ensured via the use of the EAA AVM label.

5) During the assessment procedure of an applicant’s AVM, how does the EAA ensure that potential competitors do not get insights into the applicant’s data, methods and models?

At each stage of the assessment procedure appropriate Non-Disclosure Agreements and Chinese walls will be put in place wherever necessary. The EAA makes absolutely sure that no potential competitor (i.e. an EAA member active in the same jurisdiction) will be part of the assessment procedure of those technical details about an applicant’s AVM that the applicant may regard as sensitive.

6) What happens if an applicant’s data provider does not allow the applicant to pass on the original data to any third party, i.e. the data must not leave the applicant’s server.

In those cases the EAA is happy to perform an on-site inspection of the data, and would just ask the applicant to cover the travel cost occurring for the person(s) doing the inspection on a purely at-cost basis. The inspection itself is part of the assessment procedure and would be covered by the application fee (please see also below the response to question 7.).

7) Do any costs occur for the assessment procedure?

At the beginning of the assessment procedure an Application Fee of 3,000 EUR is applicable, which is intended to cover the personnel costs entailed in handling and evaluating the application. Applicants should note that this fee is non-refundable, either in part or in full, regardless of the stage that the application may progress to. However, where the application to join is successful, the sum of the Application Fee will be deducted in full from the first year’s EAA Membership Fee.

8) What is the EAA Membership Fee?

Upon becoming a member of the EAA, after a successful application, there will be a one-off Joining Fee of 12,500 EUR intended to cover the parts of the economic resources already in place at the organization, the historic investments in setting up the EAA made by previous members, e.g. to produce the required legal documents, develop the branding, investing in political communication etc. This fee is the same for all new members. All members of the EAA will hold a share in the assets of the EAA.

In addition, there will be ongoing Membership Fees as set by the members on a calendar year basis, depending on the operational levels of expenditure actually incurred or required to meet the aims and objectives of the EAA [hyperlink to objectives].

This Membership Fee currently stands at 25,000 EUR per year, subject to re-budgeting at the last EAA Plenary of each year.

The Membership Fee would be applied on a pro-rata basis from the date of accession to the end of the calendar year.

A rebate on the membership fee may be available depending on the size of the market, the total company revenue and the AVM revenue.

9) What is the structure of the assessment procedure for an applicant’s AVM, and how long does the assessment usually take?

The assessment procedure, which has been the same for all members who have joined the EAA since its foundation, consists of four stages, with each stage gradually entering into greater levels of detail to evaluate the application and ascertain whether the relevant requirements as set by the EAA are being met.

As for the duration of the entire procedure, this depends partially on how quickly the applicant is able to provide the information required. The EAA tries to respond to and assess the information provided by the applicant as quickly as its resources allow. If no hurdles are met, the application procedure could be completed within four to five months.

10) If anything non-compliant is found during the assessment procedure, does the applicant have the opportunity to fix this during the assessment, or will the assessment be stopped with a negative result?

If some of the information required in the different stages is deemed not to be detailed enough applicants have the chance to provide further information within a given timeframe. If this still does not satisfy the requirements, the assessment would be stopped with a negative result at that stage However, each applicant would receive feedback as to which technical requirements were not met and would need to be improved in order to have the chance of being compliant.

11) If the result of the assessment is negative, does a rejected applicant have the opportunity to apply again?

Yes, any applicant will have the opportunity to apply again after a certain period of time, and after the appropriate changes to their AVM have been made.

12) How often are members’ AVMs retested to ensure compliance?

Members’ AVMs are requested to provide sufficient evidence for continued compliance of their AVMs to the requirements on a regular basis.

13) What are the main activities of the EAA? What do members have to contribute?

 The main activities of the EAA all contribute to the implementation of the association’s three main strategic pillars:

  • to promote AVM awareness
  • to represent the interests of the AVM industry
  • to establish consistent quality standards for AVMs

The EAA holds plenaries three times a year where participation of at least one representative from each member is encouraged.

The association has also set up three working groups to develop relevant input on the three strategic pillars. Members are encouraged to lend their expertise where applicable and to participate in at least one of these groups to support the EAA in fulfilling its mission.

14) What are the benefits of an EAA membership?

The EAA represents and furthers in the interests of its members vis-a-vis the European institutions and other market influencers, and makes its voice heard on legislative and regulatory initiatives through a dedicated outreach strategy, joint positions on public consultations and regular exchange with legislators, regulators, market participants and other relevant stakeholders.

The EAA AVM Label is increasingly seen as a "quality stamp" recognised by the users of AVMs as a differentiator between an EAA member and other AVM providers.

As a member of the ECBC (European Covered Bonds Council) EAA members have the opportunity to participate in the bi-annual plenaries to hear the latest developments in the covered bond market and to network with banks and investors.

The EAA has a close working relationship with the EMF (European Mortgage Federation) which helps to increase the understanding and recognition of AVMs in the market place, e.g. by the publication of a joint paper.

The EAA is sponsoring and participating in two of the largest conferences in structured financial products (covered bonds and RMBS) to promote jointly the use of AVMs which set the highest industry standard in Europe.