Securitisation Regulation—essentials
Securitisation Regulation—essentials

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Securitisation Regulation—essentials
  • Securitisation Regulation and related legislation—background and purpose
  • Securitisation Regulation—Level 2 measures
  • Securitisation Regulation—Level 3 measures
  • Articles 4 and 11 of EMIR as amended by Article 42 of the Securitisation Regulation—Level 2 measures
  • Securitisation Regulation—other EU regulatory materials
  • Securitisation Framework—UK regulatory materials
  • Industry initiatives and documents
  • Securitisation Regulation—General definitions
  • STS securitisations
  • more

BREXIT: The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018 (EU(W)A 2018). This has an impact on this Practice Note. For guidance, see Practice Notes: Brexit—impact on finance transactions—Brexit planning and impact—financial services, Brexit—impact on finance transactions—Key issues for securitisation transactions, Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs and Preparing for Brexit: Securitisation Regulation—quick guide.

Securitisation Regulation and related legislation—background and purpose

In September 2015, the European Commission published the Action Plan on Building a Capital Markets Union. The Action Plan proposed a broad range of measures which would create unified the capital markets across the EU’s 28 Member States—a Capital Markets Union or CMU. This would promote investment and boost growth.

The CMU Action Plan included this on securitisation:

‘Following the crisis, EU securitisation markets remain significantly impaired, damaged by concerns surrounding the securitisation process and the risks involved. While these weaknesses manifested themselves primarily via securitisations based on US sub-prime loans, the regulatory reform response that followed applied to all securitisations. There is no intention to undo EU reforms addressing the risks inherent in highly complex and opaque securitisations. However, it is important that securitisation is revived to ensure that it can act as an effective funding channel to the wider economy and mechanism to diversify risks.