The Council of the EU has formally adopted the following rules aimed at facilitating the development of a securitisation market in Europe:

  • Regulation of the European Parliament and of the Council laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2018; and
  • Regulation of the European Parliament and of the Council amending Capital Requirements Regulation.

One of the main political issues resolved relates to a so-called risk retention requirement. This refers to the interest in the securitisation that originators, sponsors or original lenders of securitisations need to retain themselves. The requirement will ensure that securitised products are not created solely for the purpose of distribution to investors. The negotiators agreed to set the risk retention requirement at 5% in accordance with existing international standards and in line with the Council’s negotiating position.

View Capital Markets Union: Council formally adopts Securitisation Regulation and CRR Amendment Regulation, 20 November 2017