EU Securitisation Reform: Laying a New Foundation and What Comes Next

The Commission package, published in June 2025, is set to lay a new foundation for the European securitisation market. The regulatory package is now moving through Parliament and Council, aiming to cut friction in reporting and due diligence while recalibrating bank capital rules.

After years of rather subdued issuance, securitisation is firmly back on the EU’s capital markets agenda. Policymakers see a better‑functioning market as one way to mobilise private capital, spread credit risk beyond banks, and ultimately support lending to households and businesses, without repeating the excesses that fuelled the global financial crisis.

The European Commission has framed its targeted review as an early deliverable under the Savings and Investments Union (SIU) strategy, with an explicit aim: remove “undue issuance and investment barriers” while preserving transparency, investor protection, and financial stability.

• Bank prudential treatment (Capital Requirements Regulation, CRR). Proposed amendments aim to increase the risk-sensitivity of risk weight floors and easing of p-factors, responding to long‑standing complaints that EU securitisation exposures can be “over‑capitalised” relative to their observed performance.
• Liquidity treatment (Liquidity Coverage Ratio Delegated Regulation, LCR). Draft changes would adjust how certain securitisation positions can be treated for banks’ liquidity buffers.
• Non‑prudential rules (Securitisation Regulation, SECR). The package targets high operational costs and duplicative requirements, with changes around transparency/reporting, investor due diligence, and clearer key definitions of “public” versus “private” securitisations. 

Across the file, the Commission’s message is consistent: keep the post‑crisis safeguards while making the framework easier to use in practice and more proportionate to risk. In plain terms, this means less administrative burden, a clearer distinction between public and private transactions, and prudential rules that better reflect the risk profile of the underlying securitisation.

• Recalibrated capital and liquidity treatment. The CRR/LCR elements are designed to improve risk sensitivity and reduce cliff effects, with a view to unlocking balance‑sheet capacity for new lending.
• Due diligence that leans on supervision. Where EU‑regulated sell‑side parties are involved, proposals seek to remove duplicative verification steps for investors and focus effort where it adds most value.
• Transparency that matches the market. A clearer “public vs private” boundary is intended to make reporting obligations more workable—especially for private securitisations.
• Fine‑tuning product labels. Work on the Simple, Transparent and Standardised (STS) regime continues, and policymakers have floated additional concepts (such as a safer “resilient” category) aimed at distinguishing lower‑risk structures.

The legislative engine in Brussels is running. The European Commission tabled its reform package on 17 June 2025, after which both co-legislators began developing their negotiating positions.

On 5 May 2026, the European Parliament approved its position on the Securitisation Regulation and Capital Requirements Regulation files without undue delay, marking a key step toward trilogue negotiations.

The European Parliament’s ECON Committee and the Council have since focused on balancing burden reduction with supervisory safeguards.

Tentative Timeline for the New EU Securitisation Reform:

• June 2025: Commission adopts proposals to amend SECR and CRR and consults on related LCR/Solvency II delegated changes.
• December 2025: Council agrees its negotiating position, including targeted capital relief for lower‑risk securitisations and administrative simplifications.
• May 2026: Parliament formally adopts its position on CRR and SECR.
• H2 2026 (expected): Trilogue discussions between Parliament, Council, and Commission should aim to converge on final texts, after which detailed technical standards and templates are likely to follow.

Recent European Parliament input adds further detail to the direction of travel on transparency, due diligence, and market infrastructure:

• Public vs private securitisation definition and “repeat transaction” concept

A securitisation would be considered public where a prospectus is required or where the underlying pool is actively managed by the originator or sponsor. A private securitisation is defined residually as any securitisation that is not public. A new “repeat transaction” concept is also introduced to support consistency in due diligence practices and facilitate investment in well-established structures.

• Third-country investor due diligence adjustments

The Parliament proposes easing requirements that currently force alignment with EU disclosure templates for third-country issuers. Instead, investors would verify that non-EU issuers provide information that is substantively equivalent to EU transparency standards, reducing duplication while maintaining oversight of compliance with Regulation (EU) 2017/2402.

• Use of securitisation repositories for reporting (public and private)

Reporting of securitisations through existing repository infrastructure is reinforced, including for private transactions. This is intended to reduce costs for market participants and allow national competent authorities to leverage existing reporting systems more efficiently.

The EU’s securitisation reform is no longer a conceptual debate; it is in the hands of legislators. If policymakers can keep the package focused on genuine burden reduction and more risk‑sensitive capital treatment (without diluting core safeguards), the outcome could be a more functional framework that supports issuance, strengthens risk transfer, and broadens investor participation.

The next meaningful inflection point will come in the second half of 2026 when trilogues determine the technical detail that ultimately decide whether the market response is meaningful.

In parallel, market stakeholders such as European DataWarehouse (EDW) are engaging through dedicated events and technical discussions over the coming months to assess implementation impacts and emerging calibration choices.