Clean-up call option

In the context of a securitization, a contractual option on the part of the originator or servicer (sponsor) to repurchase or cancel securitization exposures before all underlying exposures have been closed out if the residual amount of outstanding exposures falls below a certain threshold, usually set by regulators at less than ten percent. – Regulators require that the reintermediation option not be designed to avoid allocating losses to credit enhancement positions or other positions held by investors, nor be otherwise directed toward credit enhancement. – See Reintermediation, support, implied.

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