The European Supervisory Authorities publish evaluation report on the Securitisation Regulation

The Joint Committee (JC) of the European Supervisory Authorities (ESAs) has today published its evaluation report on the functioning of the EU Securitisation Regulation (SECR). The report puts forward recommendations to strengthen the overall effectiveness of Europe’s securitisation framework through simplification, while ensuring a high level of protection for investors and safeguarding financial stability.

This report identifies areas where the regulatory and supervisory framework can be enhanced, supporting the growth of robust and sound securitisation markets in Europe.

Key recommendations

Clarifying the scope of the Securitisation Regulation

The ESAs recommend specifying that the application of SECR is triggered where at least one party to the securitisation — whether on the sell-side or buy-side — is established in the European Union. This aims to ensure legal certainty and consistent supervision.

Broadening the definition of public securitisation

The report proposes reviewing the definition of public securitisation to include transactions where securities are:

• Issued with a prospectus approved under the EU Prospectus Regulation; or

• Admitted to trading on EU-regulated markets or multilateral trading facilities (MTFs); or

• Marketed broadly with non-negotiable terms and subject to a market test requiring EU originators or sponsors to demonstrate that transactions are not offered to an undefined public.

Introducing proportionality in due diligence requirements

The report calls for more proportionate and practical due diligence requirements, enabling institutional investors to receive data in formats that support meaningful risk assessment, along with commitments from sell-side parties to provide ongoing information throughout the life of the transaction.

Simplifying transparency and reporting requirements

Recommendations include streamlining reporting templates for public securitisations, improving data standardisation and introducing flexibility to use aggregated or stratified data for certain asset classes. The report also suggests targeted exemptions to reduce compliance burdens for small and medium-sized reporting entities.

Targeted changes to the STS framework

The report proposes focused adjustments to improve the efficiency of the Simple, Transparent, and Standardised (STS) framework, particularly in relation to on-balance-sheet (OBS) securitisations introduced under the Capital Markets Recovery Package (CMRP).

Clarifying risk retention rules

Clearer guidance on risk retention is recommended to reduce interpretation challenges, particularly for Collateralised Loan Obligations (CLOs) and including the term “predominant source of revenues”.

Promoting greater supervisory consistency across Europe

The need for stronger supervisory convergence is highlighted to prevent fragmentation and ensure consistent application across Member States. In the short term, this could be achieved through stronger coordination at the ESAs Joint Committee Securitisation Committee. In the longer term, the ESAs suggest exploring more consolidated European supervisory arrangements, especially for cross-border transactions.

Next steps

These recommendations will feed into the European Commission’s legislative review of the securitisation legislative framework, contributing to the development of well-functioning, resilient and transparent securitisation markets across the European Union.