Background

On 17 June 2025 the European Commission published a package of proposals to amend the EU securitisation framework and promote the development of the EU securitisation market. These proposals include amendments to the Securitisation Regulation, the Capital Requirements Regulation and the Liquidity Coverage Ratio Delegated Regulation. Proposals to amend the Solvency II Delegated Regulation are expected in the coming weeks.

The proposed changes to the Capital Requirements Regulation focus on adjusting the securitisation prudential framework for banks, such that capital requirements and the significant risk transfer framework (SRT) more accurately reflect the risks involved in specific securitisation transactions. The proposed changes to the Liquidity Coverage Ratio (LCR) Delegated Regulation are intended to address inconsistencies in the eligibility requirements for securitisations to be included in banks' liquidity buffers.

This News Flash will focus on the proposed changes to the Securitisation Regulation. Those changes generally aim at reducing operational costs for issuers and investors and simplifying some of the requirements surrounding due diligence and transparency.

An overview of the key proposed changes to the Securitisation Regulation 

• Introduction of a definition of “public securitisation” and “private securitisation”
• A public securitisation will be defined as a securitisation (a) that requires a Prospectus Regulation prospectus, (b) where the securitisation notes are admitted to trading on a Union trading venue (which includes regulated markets and MTFs in the EU) or (c) marketed to investors on standard terms and conditions on a “take-it-or-leave-it” basis.
• A private securitisation will be one which does not fall within (a), (b) or (c).

• Due diligence requirements

• In general, the rules will be more principles-based and risk-focused:
• Investors will no longer need to verify certain information when the sell-side party is established and supervised in the EU.
• A due diligence assessment should be proportionate to the risk of the securitisation position.
• Securitisations guaranteed by multilateral development banks will be exempt from due diligence requirements.
• Reduced due diligence requirements will apply where certain public entities guarantee or hold a first loss tranche of at least 15%. Risk retention obligations will also be waived in this scenario.
• However, investors in non-EU securitisations will still need to verify compliance by sell-side parties with various requirements set out in the Securitisation Regulation.

• Transparency and Reporting
• Simplified reporting templates will be drawn up by the European Supervisory Authorities (in close cooperation with ESMA and EIOPA).
• A dedicated template for private securitisations should closely follow the existing ECB guide on the notification of securitisation transactions.
• Private securitisations should also report to securitisation repositories using this template (which should not be publicly disclosed).

• STS
• It will be sufficient for the purposes of the homogeneity requirement for STS securitisations that at least 70% of the underlying pool of exposures consist of SME loans from different jurisdictions (rather than 100%).
• Amendments to the STS collateralisation requirement are proposed to make it easier for insurers and reinsurers to participate in synthetic securitisations.

• Supervision
• Various proposals are included, with the overall aims being to make better use of existing supervisory structures, enhance collaboration among authorities, and ensure effective supervision through enhanced convergence and improved coordination.

Next steps

The Securitisation Regulation and Capital Requirements Regulation proposals will be reviewed by the European Parliament and the Council. The Liquidity Coverage Ratio Delegated Regulation proposal is open for consultation for a 4-week period. Proposals to amend the Solvency II Delegated Regulation to lower capital requirements for senior tranches of non-STS securitisations and align the (insurance) prudential treatment of senior tranches of STS securitisations more closely with those of covered bonds or corporate bonds are expected to be published by the European Commission in the coming weeks.