The European Commission published a formal legislative proposal on 17 June 2025 in connection with the current EU securitisation framework (the “Securitisation Legislative Proposal”) and submitted it to the Council of the EU and the European Parliament for approval pursuant to the EU’s ordinary legislative procedure. The Securitisation Legislative Proposal proposes amendments to Regulation EU 2017/2402 (the “EU Securitisation Regulation”) and to the prudential legislation which forms part of the current EU securitisation framework. You can read more about the Securitisation Legislative Proposal here.
On 19 December 2025, the Council of the EU announced and published its agreed position (the “Council Position”) on the Securitisation Legislative Proposal. From the perspective of market participants in securitisation transactions, the Council Position has been viewed as containing some suggested amendments to the initial Securitisation Legislative Proposal which are seen as positive. You can read more about the Council Position here.
On 5 May 2026, the European Parliament’s Committee on Economic and Monetary Affairs announced and published its final position on the Securitisation Legislative Proposal and it was formally approved as the agreed position of the European Parliament at a plenary session of the European Parliament on 21 May 2026 (the “Parliament Position”). The Parliament Position essentially constitutes the negotiating position of the European Parliament prior to entering into “trilogue” discussions with the Council of the EU and the European Commission, which are likely to commence shortly. In a number of respects, the Parliament Position contains compromise positions as between the initial Securitisation Legislative Proposal published by the European Commission and the Council Position.
Who should be interested in the Securitisation Legislative Proposal?
The Securitisation Legislative Proposal is of interest to a wide group of stakeholders, including the following:
- sponsors and arrangers of securitisation transactions;
- issuers and originators of securitisation transactions; and
- institutional and retail investors in securitisation transactions.
What does the Parliament Position provide for?
The Parliament Position contains some suggested amendments to the Securitisation Legislative Proposal, including the following:
- EU Securitisation Regulation – Definition of Public Securitisation: The Parliament Position removes the expanded definition of ‘public securitisation’ proposed under the European Commission’s Securitisation Legislative Proposal. That expanded definition would have captured, for example, transactions where debt instruments were listed on an EU trading venue for technical reasons – such as tax efficiency or specific investor requirements – rather than to promote secondary market liquidity. By remaining ‘private securitisations’, these transactions would benefit from lighter disclosure requirements and additional confidentiality safeguards. In this respect, the Parliament Position and Council Position are aligned. However, unlike the Council Position, the Parliament Position also proposes a new limb to the definition of ‘public securitisation’ – which limb covers transactions where the underlying pool of exposures is “actively managed”.
- EU Securitisation Regulation – Sanctions: The European Commission’s Securitisation Legislative Proposal proposes extending the existing administrative sanctions regime under the EU Securitisation Regulation to investors who breach their due diligence obligations. The Parliament Position proposes to soften this by reducing the maximum penalty to half the investors’ initial investment and by acknowledging the need to reduce overlap with investors’ applicable sectoral rules in order to avoid duplications for the same infringement. The Council Position has gone further than the Parliament Position by providing that investors would continue to face sanctions under their applicable sectoral rules only.
- EU Securitisation Regulation – Third Country Securitisations: The Parliament Position effectively requires that non-EU issuers of securitisation transactions to EU investors need to meet “substantively equivalent” disclosure requirements to those applicable to EU issuers. However, it also removes the requirement for EU investors to verify strict compliance with the disclosure templates mandated by the EU Securitisation Regulation by non-EU sell side parties issuing to EU investors. The Parliament Position and the Council Position are materially similar on this point. This proposed amendment was not contemplated by the European Commission in the Securitisation Legislative Proposal.
- Prudential Legislation – Definition of Senior: The Parliament Position reverses the changes to the definition of “senior” set out in the European Commission’s Securitisation Legislative Proposal. The Securitisation Legislative Proposal proposes adding a time-varying element to the definition by requiring a minimum attachment point moving with losses of underlying assets. However, the Parliament Position would ensure that the seniority test will remain static over the life of a securitisation transaction. In this respect, the Parliament Position and Council Position are aligned.
- UCITS – Investment Caps: The Parliament Position raises the investment limit for undertakings for collective investment in transferable securities (UCITS) by allowing them to acquire up to 20% of securities in securitisation transactions, up from the current 10% cap applicable to all debt securities issued by any single body. This proposed amendment was not contemplated by the European Commission in the Securitisation Legislative Proposal. The Council Position also proposes raising the investment limit for UCITS but in a different way by allowing them to acquire up to 50% of securities in a ‘public securitisation’.
What happens next?
The European Commission, the Council of the EU and the European Parliament will shortly enter “trilogue” discussions – where all three bodies will debate and agree a final compromise position.
While a definitive timeline is still evolving, it is unlikely that the amendments to the current EU securitisation framework will be in force prior to mid-2027. Until the Securitisation Legislative Proposal is approved by the EU and enters into force, the EU Securitisation Regulation as currently in force remains the law.
Contact Us
We are continuing to track developments in this space. For further information on the Securitisation Legislative Proposal and the related Parliament Position on same, please contact Christian Donagh, Alan Keating, Turlough Galvin, William Foot, Alan Bunbury, Vincent McConnon, Gearoid Murphy or your usual Matheson contact.
This article is provided for general information purposes only and does not purport to cover every aspect of the themes and subject matter discussed, nor is it intended to provide, and does not constitute or comprise, legal or any other advice on any particular matter.
