Initial Responses to the Commission’s Targeted Consultation on EU Securitisation
DCM Focus Series

As we highlighted in our recent article, the European Commission’s targeted consultation on the EU securitisation framework marks an important milestone on the road towards market reform. The consultation period has now closed and the Commission has yet to formally publish submissions. However, a first wave of responses has begun to emerge directly from stakeholders, offering valuable initial insights.
The indications so far... While firm areas of consensus are too soon to call, some interesting viewpoints are surfacing, which include:
- Due diligence and transparency requirements: One of the clearest areas of consensus so far is that the due diligence and transparency requirements under the EU Securitisation Regulation (SECR) are overly burdensome and disproportionate. There is support for a move towards a more principles-based approach and streamlined disclosure templates.
- Prudential treatment of securitisation: Another area of early alignment is that the prudential treatment of securitisation is overly conservative and hinders market development, with a preference for a more risk-based prudential treatment.
- Scope of SECR: There are concerns about the broad definition of ‘securitisation’ under SECR, capturing transactions that some believe should not be included. However, not everyone agrees that the current definition should be changed.
- Definition of ‘Sponsor’: There are mixed views on expanding the definition of ‘sponsor’ to include alternative investment fund managers (AIFMs). While some consider AIFMs well-suited to meeting the sponsor obligations under SECR, others point out potential misalignments with their business models and are concerned about added legal complexities.
- Expansion of the STS Standard: There is support for expanding the Simple, Transparent and Standardised (STS) standard to include, for example, actively managed CLOs and synthetic transactions.
- Creation of a Pan-European Securitisation Platform: While this proposal is welcomed as a tool to foster standardisation and promote market integration, its potential complexity and impact on financial stability has been questioned.
- Jurisdictional Scope of SECR: Some respondents call for clarity about the jurisdictional scope of SECR, particularly in respect of cross-border transactions.
We will be keeping a close watch on further developments. Stay tuned.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
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