Securitisation

 Overview: 

EU regulatory basis

In 2018, two EU Regulations setting out a new framework for European securitisation entered into force.

  1. Regulation (EU) 2017/2402 (the Securitisation Regulation) which introduced a new framework for simple, transparent and standardised (STS) securitisations.
  2. Regulation (EU) 2017/2401 (the Securitisation Prudential Regulation, or SPR) replaces certain provisions of the Capital Requirements Regulation (CRR) and sets out the framework under which certain institutional investors can benefit potentially from more favourable regulatory capital treatment for STS securitisation exposures.

In 2021, Regulation (EU) 2021/557 introduced synthetic securitisations into the STS framework. In April 2023, the EBA published a consultation on draft guidelines for simple, transparent and standardised (STS) criteria for on-balance-sheet securitisations. The Final Report was published in May 2024. 

On 17 July 2025, the EC launched a consultation on the draft Delegated Act under the review of the Solvency II Directive, which included parts that belong to the wider securitisation reform securitisation. The final amended Regulation was published in October 2025. The  follwoing changes have been introduced to reduce the risk factors for securitisation investments:

  • for non-STS securitisations, a new set of risk factors is introduced for senior tranches, while the risk factors for non-senior tranches are reduced in order to ensure a senior-to-non-senior capital requirement ratio that better aligns with banking rules.
  • for STS securitisation, the prudential treatment of senior tranches is aligned with that of covered bonds, and the treatment of non-senior tranches is adjusted by the same extent as for senior tranches.

 

UK regulatory basis

  1. The EU Securitisation Regulation was amended by the Securitisation (Amendment) (EU Exit) Regulations 2019 and as so amended is entitled the 'UK Securitisation Regulation' below. 
  2. On 30 April 2024, the Financial Conduct Authority (FCA) published Policy Statement PS24/4, outlining the final rules replacing the assimilated EU Securitisation Regulation.  The Prudential Regulatory Authority (PRA) also published its own Policy Statement (PS7/24), which mirrors the FCA’s and focuses on the requirements for which it has supervisory responsibility.
  3. The UK also adopted The Securitisation Regulations 2024, which were laid in Parliament on 22 April 2024.  

The new rules bear significant resemblance to the assimilated EU Securitisation Regulation, but introduced some relevant changes related to due diligence and disclosure and to risk retention:

  • A more principles-based and proportionate approach to verifying disclosure made by UK and overseas manufacturers, clarifying what information is to be received by institutional investors when investing in both domestic and overseas securitisations.
  • The disclosure and due diligence obligations around pricing for private deals have been adjusted so that these happen "before pricing or commitment to invest", which is potentially a helpful clarification.
  • The FCA has also clarified the distinction between primary and secondary market investors.  Under the new rules, secondary market investors no longer need to check that information has been provided before pricing and merely need to check they have information before they are committed to invest.
  • Institutional investors who are subject to regulatory due diligence obligations are now permitted to delegate that due diligence. However, they remain responsible for any failure to comply unless the delegation is to another UK institutional investor regulated by either the FCA or the PRA.
  • The new rules facilitate risk retention on securitisations of non-performing exposures.
  • The FCA has clarified that hedging is permitted where it is undertaken prior to the securitisation as part of prudent credit granting or risk management.
  • A new provision considers that any entity that securitises a pool of its own debt is compliant with risk retention requirements.

 

 

Upcoming actions:

EU

In June 2025, the European Commission proposed a comprehensive reform of the EU securitisation regulatory framework. The Council of the EU published its general approach to the reform in December 2025, while the European Parliament's ECON Committee adopted its position in May 2026.  The review is expected to be finalised in Q4 2026, with entry into force in early 2027 and application from late 2027 onwards. 

The ACC continues to engage with EU policymakers throughout the trilogue process. 

Further information.

 

UK

On 17 February 2026, the Financial Conduct Authority (FCA) published consultation paper (CP26/6) on reforming the UK securitisation framework. This included multiple proposals to introduce more principles-based requirements in areas of the securitisation framework that are seen as prescriptive for investors and issuers.  Final rules are expected by the end of 2026. 

The ACC continues to engage with UK regulators, particularly on issues related to CLOs. 

Further information.

 

 

Recent developments: 

EU developments

ESMA consultation on securitisation disclosure templates

In December 2023, ESMA released a consultation paper outlining options for potential changes to the current securitisation disclosure framework.   The ACC responded in March 2024.

 

2024 European Commission consultation on the securitisation regulatory framework

On 9 October, the European Commission (EC) published its targeted consultation on securitisation, which comes after many calls for reform including by the Eurogroup, the European Council and the Noyer, Letta and Draghi reports.

The EC sought to gather input from stakeholders on the current securitisation framework to inform the legislative proposal expected for summer 2025.  The consultation followed a holistic approach and was comprised of 175 questions on a wide range of issues, including:

  • Effectiveness of the current securitisation framework: This section considers indicators such as the revival of a safer market, the reduction of investor stigma and the improvement of financing of the EU economy.
  • Impact on SMEs: This section seeks input on the barriers to securitise SMEs loans and on how securitisation can contribute to the access to finance for SMEs.
  • Scope of application of the current Regulation: This section seeks input on the jurisdictional scope of the Regulation and the legal definitions of “securitisation transaction” and “sponsor”, including considering AIFMs as sponsors. The EC is also considering whether to expand the definition of public securitisations.
  • Due diligence and transparency requirements: This section seeks quantitative evidence on costs derived from compliance with these requirements.
  • Supervision): The EC states that supervision should be streamlined and improved in the EU to enhance consistency, coordination and a level playing field.
  • STS standard: The EC seeks input on the functioning of the STS standard, which it acknowledges might be too burdensome to comply with.
  • Securitisation platform: Input on its potential usefulness, including a common safe asset. Questions also touch upon the establishment of guarantees.
  • Prudential and liquidity risk treatment of securitisation for banks
  • Prudential treatment of securitisation for insurers
  • Prudential framework for pension funds

The ACC and AIMA submitted a response to the European Commission’s (EC) targeted consultation on the functioning of the EU securitisation framework.

Our response echoed the points of the ACC’s position paper and highlighted the value of the securitisation market to the real economy and to mobilise capital to invest in SME growth and key strategic areas. 

The key focus of the response was:

  • Introducing principles-based and proportionate due diligence and transparency requirements for sophisticated investors and issuers of securitisations:  Detailed due diligence obligations for institutional investors add little value, yet the associated compliance risks are a significant barrier to their investment in securitisation products.
  • More risk-based capital and liquidity requirements for prudentially regulated investors:  Capital requirements for insurers have significantly reduced their incentives to invest via securitisations, despite the fact that the asset profile of many securitised products is a natural fit for insurance liabilities.
  • Allowing AIFMs to sponsor securitisations: This would broaden the population of financial institutions participating in the production and distribution of securitisations. AIFMs and the AIFs they manage are currently prohibited from acting as sponsors of securitisations under the Securitisation Regulation which envisaged this only being performed by a credit institution or a MiFID licensed entity.

Additionally, our response included:

  • Simplifying and broadening the scope of the STS labels:  Actively managed CLOs should be permitted to qualify as Simple, Transparent and Standardised.
  • Narrowing the scope of the definition of securitisation to enable the green and digital transitions:   Any type of transaction that involves the tranching of risk, however simple, might fall within the scope of the Securitisation Regulation, which captures transactions that should otherwise not be considered as securitisations, either because they are simple products or because they play a strategic role in mobilising private capital for EU social, economic and political objectives.
  • Allowing sophisticated investors to invest in non-EU securitisation markets:  EU investors are prohibited from investing in some of the largest and most liquid US securitisation products, specifically US open-market CLOs. This restricts EU investors and those captured under the definition of institutional investor and hampers their competitiveness in relation to their global peers.

 

ACC position paper on securitisation

In expectation of this new effort toward reform, the ACC published a position paper on ‘Reviving the EU securitisation market’ in July 2024.

 

UK developments

FCA consultation on securitisation regulation 

In August 2023, the FCA released a consultation paper (CP) outlining proposed amendments to the UK Securitisation Regulation (UK SR). 

AIMA responded in November 2023.

 

UK Securitisation Regulations 2024

In January 2024, HM Treasury published the UK Securitisation Regulations 2024.  This Statutory Instrument (SI) creates a new framework within which the FCA and the PRA can make rules in relation to securitisation

 

 

Background developments:

Capital Markets Union – High-Level Forum recommendations

The ACC welcomed the initiative of the CMU HLF to make the securitisation framework more efficient and better aligned with established industry practices, as part of the 17 interconnected recommendations issued in the final report. The ACC supports the seven key recommendations proposed by the HLF, in particular the recommendation regarding reducing the cost of SME financing and differentiating between disclosure and due diligence requirements for public and private securitisations.

 

ESAs Joint Opinion on the jurisdiction scope of the Securitisation Regulation

The ESAs Joint Opinion has been issued to identify areas of uncertainty which exist regarding scope/interpretation of the Securitisation Regulation The Opinion calls for the European Commission to either issue interpretative guidance or amend the Regulation.

The ACC and AIMA submitted a position on the ESAs opinion to the ESAs and other stakeholders.

 

2021 European Commission consultation on the EU Securitisation Framework

The European Commission published a consultation on the EU Securitisation Framework, covering the following key areas:

  • The general impact of the regulation;
  • Private securitisations;
  • Due diligence and jurisdictional scope;
  • The need for an simple, transparent and standardised (STS) equivalence regime;
  • ESG disclosure;
  • The potential role of limited licensed banks performing the functions of securitisation special purpose entities (SSPEs); and
  • Supervision.

The ACC and AIMA responded to this consultation. Members can review our response here.

 

Call for evidence on the UK Securitisation Regulation

The UK Treasury has published a call for evidence on the Securitisation Regulation seeking views on the Regulation and how the UK market compares to other countries.  

The ACC and AIMA have submitted a response to this call for evidence providing comments on the following key areas:

  • Scope of the regulation;
  • Simple, Transparent and Standardised (STS) cetification for Collateralised Loan Obligations;
  • ESG and securitsations;
  • Disclosure of private securitisations; and
  • Risk retention modalities.

Members can review our response here. 

Following the consultation, the UK Treasury has published its review of the Securitisation Regulation. The report provides the UK Government position on the functioning of the Securitisation market and the role of the Securitisation Regulation.  Key takeaways on the points covered in our response include:

  • Functioning of Securitisation market:  Securitisation Regulation remains an important element to the functioning regulation of securitisation in the UK and HM Treasury does not see the need to introduce macroprudential measures or other additional regulatory enhancements for both the primary credit lending market and the securitisation market at present
  • Institutional investor definition: HMT will be amending the definition of institutional investor to take certain unauthorised, non-UK AIFMs out of scope of the due diligence requirements but does not think it’s appropriate to exclude sub-threshold AIFMs. It is not specified when this will take place other than stating that this will be taken forward at the appropriate time
  • Disclosures for private securitisations:  Little benefit to extending the public disclosure requirements (i.e. reporting to an SR and filling in two additional templates) to private securitisations
    • Distinguishing between public and private securitisations solely on the basis of whether a prospectus is required under section 85 FSMA may not always be appropriate.
    • HM Treasury intends to work with the regulators to consider where changes to the current framework may be appropriate
    • Any changes to the definition of public and private securitisation, and to disclosure requirements, would be developed with industry input via consultation.
  • Environmental Disclosure Requirements:
    • Environmental information important for securitisation investors but acknowledge difficulties with the availability and standardisation of such data
    • HM Treasury and the regulators will consider whether it is appropriate to extend the Sec Reg’s environmental information disclosure requirements, as raised in Article 46(2)(f) but any additional information required by the Sec Reg’s disclosure templates likely to be subject to availability, as is the case for the Regulation’s current requirements.
    • Any changes will also take account of developments in the regulation of green finance disclosure that will soon be implemented (e.g. the Sustainability Disclosure Requirements (SDR)) and balance between providing information and not overburdening securitisation manufacturers
    • Not appropriate for green securitisations to be given beneficial capital treatment at present
  • Risk retention:
    • Framework broadly works as intended and no plans to restrict or adapt the existing modalities at this time
    • HM Treasury, and the PRA through their Technical 23 Standards process, will review specific areas, including:
      • Transferring the risk retention manager;
      • Allowing eligible servicers to fulfil risk retention requirements in NPE securitisations; and
      • Calculation of the risk retention on the transaction price for NPE securitisations.
      • The PRA intends to prioritise work on the risk retention Technical Standards in 2022.
      • HM Treasury can see potential benefits to L-shaped risk retention and including the excess spread as an element of risk retention. However, further work with the regulators is required on this
  • STS equivalence:
    • An STS equivalence regime is desirable and should be introduced at the appropriate time
    • Any new equivalence regime will be consistent with the principles and processes set out in the November 2020 Guidance Document for the UK’s Equivalence Framework for Financial Services
    • HM Treasury not minded to remove requirement for originators and sponsors involved in an STS securitisation to be established in the UK under Article 18(2).
  • SSPEs
    • HM Treasury agrees with respondents that the current system of SSPEs works well and does not see a reason to replace it with a system of LLBs
  • Jurisdictional scope
    • Article 5(1)(f) could helpfully be clarified further and to support the ability for UK investors to invest in overseas securitisations that meet certain conditions
    • HM Treasury and the regulators will, as a priority, seek to clarify what kind of disclosures are required for securitisations where the manufacturers are established outside the UK.
    • This will balance pragmatism with high disclosure standards like those in the UK

 

EBA public consultation on draft RTS specifying requirements for originators, sponsors, original lenders and servicers relating to risk retention

The European Banking Authority (EBA) launched a public consultation on draft Regulatory Technical Standards (RTS) specifying the requirements for originators, sponsors, original lenders and servicers related to risk retention, in line with the Securitisation Regulation.

The RTS carry over a substantial amount of provisions from the EBA RTS on risk retention  submitted to the European Commission in July 2018 but addresses a number of new provisions, such as:

  • Specifying modalities of risk retention in traditional NPE securitisations;
  • Specifying requirements for the expertise of servicers acting as a retainers in NPE securitisations;
  • Impact of fees payable to the retainer on risk retention;
  • Risk retention in re-securitisations or in securitisations of own issued debt instruments; and
  • Clarification on the treatment of synthetic excess spread.

The ACC and AIMA submitted a response to this consultation. Members can review our response here.

 

European Commission report on Securitisation Regulation

In 2022, the European Commission published its report on the review of the Securitisation Regulation, concluding that the current framework works well, and only putting forward suggestions to improve requirements around disclosure templates.

 

(Last updated: July 2026)