A complex financial transaction in which loans, other receivables (such as finance leases) or assets that generate a defined or identifiable cash flow, are sold by their originator or subsequent owner to (and pooled by) a special purpose vehicle (SPV). This is known as a "true sale" securitisation. The SPV will simultaneously issue debt securities to investors and use the receipts to fund its purchase of the receivables.

The principal and interest payments on the debt securities are funded by (and limited to the extent of) the cash flows (both capital and revenue) generated by the receivables. The SPV’s obligations under the debt securities are typically secured by the receivables and their cash flows. This security is granted in favour of a security trustee for the benefit of the investors and other transaction parties.

Almost any asset can be securitised if it generates regular cash flow payments in a sufficient amount when pooled together. Common assets that are securitised are: