EU Overview
Since 1 January 2019, the EU Securitisation Regulation (Regulation (EU) 2017/2402) has provided the conduct regulatory framework for securitisation. The EU Securitisation Regulation:
- recast the main securitisation provisions in sectoral legislation applicable to banks (the EU Capital Requirements Regulation, or "CRR"), insurers (Solvency II) and fund managers (the EU Alternative Investment Fund Managers Directive regime) in a new, harmonised securitisation regime applicable to all institutional investors including UCITS and pension funds;
- as part of that harmonisation, makes risk retention and disclosure obligations applicable directly to sell side entities such as issuers (SSPEs), originators, sponsors and original lenders; and
- introduces a concept of "simple, transparent and standardised" (or "STS") securitisation into EU law.
The EU Securitisation Regulation legislative package introduced a ban on resecuritisation, a ban on securitising self-certified residential mortgage loans originated after 21 March 2014 and formal restrictions on marketing securitisations to retail investors. It also introduced a much more punitive sanctions regime for non-compliance by originators, sponsors, original lenders and SSPEs than previously existed. Sanctions for non-compliance by institutional investors continue to be provided for under the sectoral prudential regimes applicable to them.
In April 2021, the Capital Markets Recovery Package made amendments to the EU Securitisation Regulation to facilitate the securitisation of non-performing loans (NPLs) and to introduce STS for synthetic securitisations.
What's next?
On 17 June 2025, the European Commission published a set of proposed amendments to the securitisation regulatory framework, including changes to the EU Securitisation Regulation, the Capital Requirements Regulation and the Liquidity Coverage Ratio Delegated Act. A further set of amendments, affecting the Solvency II Delegated Act, was separately announced in July 2025 and has now been published as Commission Delegated Regulation (EU) 2026/269 (the "Solvency II Amendments") in the Official Journal of the European Union on 18 February 2026. The Solvency II Amendments will begin to apply on 30 January 2027. AFME published its consultation response to the Solvency II Amendments in September 2025.
UK Overview
A new regime came into force on 1 November 2024, which moved the securitisation regulatory framework to a combination of The Securitisation Regulations 2024 (significantly amended by the Securitisation (Amendment) Regulations 2024) and the rulebooks of the FCA (see PS24/4) and the PRA (see PS7/24). Securitisations closed before this date are broadly grandfathered out of the new rules. For more information, see the 'New UK Regime: Smarter Regulatory Framework' section below for more information.
The new UK securitisation framework replaced the UK Securitisation Regulation or UKSR, the onshored version on the EU Securitisation Regulation, which had been in place since 1 January 2021. For more information on the previous regime, see the 'Old UK Regime: UK Securitisation Regulation' section below.
What's next?
On 17 February 2026, the FCA published Consultation Paper CP26/6: Rules for reforming the UK Securitisation Framework and the PRA published Consultation Paper CP2/26: Reforms to securitisation requirements. The consultations propose, among other things, a less prescriptive regulatory approach to due diligence requirements and a more principles-based approach to disclosure obligations, including reducing the number and complexity of disclosure templates. The closing date for responses to the consultations is 18 May 2026, with final rules expected H2 2026.
The Securitisation (Amendment) (No. 2) Regulations 2024 came into force on 22 November 2024. The legislation extends a temporary arrangement granting preferential prudential treatment for EU-origin Simple, Transparent, and Standardised (STS) securitisations. UK investors, where they are subject to prudential regulation, currently access lower capital requirements when investing in EU STS securitisations. This instrument extends the time by which such EU STS securitisations can enter the temporary arrangement, from its expiry date on 31 December 2024, to 30 June 2026: Explanatory memorandum | De minimis assessment.
