Brussels faces pressure to avoid securitisation reforms that could further weaken investor demand
A coalition of financial and investor associations has urged Members of the European Parliament’s ECON Committee to rethink parts of the EU’s securitisation reform package, warning that some proposals risk choking off market recovery rather than supporting it.
In two letters sent on 20 April, the groups argue that recent compromise texts under both the Capital Requirements Regulation and the Securitisation Regulation could discourage issuance, reduce investor appetite and ultimately weaken the EU’s push to mobilise private capital and strengthen capital markets.
The sharpest criticism is aimed at the proposed new category of “resilient” securitisations under the CRR review.
According to the associations, the current drafting would reserve favourable prudential treatment for only a narrow group of STS transactions, mainly auto, equipment and trade receivables deals, while excluding other asset classes with long records of strong performance, such as residential mortgages, SME loans, consumer credit and credit cards.
The groups argue that this would create arbitrary distinctions between similar transactions and could penalise structures that have historically shown low losses and strong credit performance.
They also warn that the latest proposals create inconsistencies between sponsor and investor roles in ABCP structures. Banks often finance the same trade receivables assets either directly from their balance sheet or through an ABCP conduit, but under the current wording the capital treatment could differ depending on the route used.
Instead, the associations want all traditional securitisations, whether STS or non-STS, to qualify for “resilient” treatment.
The letter also pushes back against the reintroduction of different prudential treatment for originators, sponsors and investors in non-STS deals. The groups argue that this adds unnecessary complexity and overlooks the importance of non-STS securitisation in areas such as infrastructure, project finance and whole-business securitisation.
That matters because non-STS remains the larger part of the market, with €175.7bn of issuance in 2025 compared with €76.6bn for STS.
The second letter targets proposals for a dedicated sanctioning regime under the Securitisation Regulation.
The associations argue that investors are already subject to sanctions under rules such as AIFMD, UCITS, CRR and Solvency II, making a new regime duplicative and unnecessary.
They warn that extra penalties could deter investors from the market altogether, particularly if fines are linked to the size of an investor’s exposure.
That approach, they argue, would hit holders of the safest senior tranches hardest simply because those positions are larger in notional terms.
The letters underline growing industry concern that Parliament’s amendments risk drifting away from the Commission’s original goal of simplifying the framework and reviving the European securitisation market.
With trilogue negotiations approaching, the associations are urging MEPs to avoid adding complexity and instead focus on creating a more proportionate, risk-sensitive framework that can help securitisation support lending, investment and economic growth.
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