The Reform of the EU Securitisation Framework

As part of the Savings and Investments Union (SIU), the European Commission on 17 June 2025 tabled a package amending both the Securitisation Regulation (Regulation (EU) 2017/2402, SECR) and the Capital Requirements Regulation (Regulation (EU) No 575/2013, CRR). Its stated aim: to revive a European securitisation market that has stagnated since 2019 and to redirect private capital to the real economy. The Council (under the Danish Presidency) adopted its general approach on 19 December 2025; on 12 December 2025 Parliament rapporteur Ralf Seekatz (EPP, DE) presented an ECON draft report. Trilogues are expected in the second half of 2026.

Why the Commission acted

The June 2025 package responds to the Commission's own targeted consultation (October 2024), the Joint Committee's evaluation report (December 2022), the Letta and Draghi reports and a succession of industry submissions (AFME, EBF, Paris Europlace, TSI) calling for recalibration. The headline diagnosis is that the post-2017 framework — STS, reporting templates, due diligence, the non-neutral p-factor under CRR and Solvency II treatment — has become disproportionately costly compared to the credit risk involved, and is depressing issuance relative to the United Kingdom and the United States.

The building blocks of the reform

1. Prudential recalibration (CRR)

Lower risk weights and a reduced (p)-factor for senior tranches of STS transactions, differentiation between resilient and non-resilient transactions and recalibrated floors — designed so that low-risk senior exposures attract materially lower capital than today, while riskier tranches retain current treatment. Parallel changes to LCR eligibility would allow a broader set of senior STS tranches to qualify as Level 2B high-quality liquid assets.

2. Due-diligence simplification (SECR Art. 5)

Move from a prescriptive item-by-item verification regime to a more principles-based proportionate approach. EU investors would be required to verify compliance at a higher level of abstraction, with relief for investments in transactions where a sell-side party is already an EU-regulated entity. Sanctions for breach by investors would be re-aligned with the existing administrative sanctions regime of SECR.

3. Disclosure and the public/private perimeter

The Commission proposal had expanded the notion of "public" securitisations (by reference to trading venue, non-negotiable terms and listing regime). Both Council and Parliament reverse this: only securitisations with instruments listed on an EU regulated market remain "public". The Council would keep a lighter repository path for private deals; the Parliament draft would decouple private reporting from repositories entirely and require reporting only to the relevant national competent authority via a simplified private template.

4. Risk retention (SECR Art. 6)

Clarifications on eligible retainers (including for NPE and multi-seller conduit structures), on the interaction with cash management and on re-securitisations. The basic 5% net economic interest rule and the five retention options are preserved.

5. STS criteria

Targeted adjustments to homogeneity, to the treatment of restructured loans and to the geographic scope. A continuing fault line is whether homogeneity relief for SME pools should follow a process-based test (common underwriting standards) or an asset-class-based test.

6. Synthetic STS

Expansion of eligible credit-protection providers for unfunded synthetic STS — including (under the Council text) a wider range of insurers and export credit agencies subject to safeguards. The Parliament rapporteur is more cautious on the breadth of access.

7. Third-country issuers

Council mandate accepts alternative disclosure formats for non-EU transactions, provided EU investors receive substantially the same information. The Commission proposal was stricter; Parliament sits in between.

8. Solvency II

Although not formally part of the SECR/CRR package, EIOPA's advice and a parallel Commission delegated-act workstream aim to cut the capital charges for senior STS exposures held by EU insurers — one of the most frequently cited obstacles to a revival of end-investor demand.

Where Council, Parliament and Commission agree — and diverge

There is broad cross-institutional consensus on the overall direction: lower capital charges on the senior end, proportionate due diligence, a narrower "public" perimeter. The principal points of divergence heading into trilogue concern (i) the architecture of private reporting (securitisation repository versus NCA-only), (ii) the liability and sanction regime for delegated due-diligence tasks, (iii) the SME homogeneity test and (iv) the eligibility of credit-protection providers for synthetic STS. Several technical points on definitions, re-securitisation and ABCP liquidity facilities also remain open.

Indicative timeline

• 17 June 2025 — Commission publishes the legislative package (SECR and CRR amendments) as part of the SIU agenda.
• 12 December 2025 — ECON rapporteur Ralf Seekatz (EPP, DE) presents a draft report.
• 19 December 2025 — Council adopts its general approach (Danish Presidency).
• 27 January 2026 — Approximately 500 amendments tabled by MEPs.
• Early May 2026 — ECON vote expected on the Parliament's negotiating position.
• H2 2026 — Interinstitutional trilogues anticipated.

What practitioners should monitor

• The final CRR calibration — the level of the senior-tranche risk weights and the revised (p)-factor will determine whether the economics actually change for bank investors.
• The private/public boundary — any backsliding towards the Commission's broader definition would sharply increase the compliance perimeter.
• The fate of the Solvency II delegated act — without relief at the insurer end, a structural buy-side remains elusive.
• National-level transposition choices on supervisory reporting and sanctions — variation here could offset the Level 1 harmonisation effort.