Why did the European Commission propose the securitisation framework review?

The European Commission’s core objective is to amend the existing securitisation framework to remove undue issuance and investment barriers in the securitisation market. The securitisation review forms part of the European Commission’s broader ambition to deepen and integrate EU capital markets, increase the availability of financing for businesses, and ensure the EU remains competitive with other global financial centres. What the European Commission is trying to achieve How this is reflected in the legislative proposals / might look in practice Remove undue issuance and investment barriers in the securitisation market. Revised criteria and simplified procedural requirements for originating and investing in securitisation instruments. Boost the EU’s CMU in a competitive global sector. A more streamlined and internationally competitive EU securitisation market, better able to channel capital to the real economy. Maintain and strengthen the framework for simple, transparent and standardised (“STS”) securitisation. A dedicated STS framework sitting within the broader general securitisation regime, providing higher-quality instruments with clearer regulatory treatment. Update prudential requirements for credit institutions regarding securitisation exposures. Amendments to capital requirements rules to ensure prudential treatment is calibrated appropriately to revised market conditions. Ensure adequate safeguards are maintained alongside market development. Robust risk retention, transparency and due diligence obligations retained and potentially strengthened alongside market-opening measures.

What is the implementation timeline?

17 June 2025: European Commission publishes two legislative proposals to amend the securitisation framework. 25 June 2025: Technical deliberations commence in the Council of the EU’s Working Party on Financial Services and Banking Union. November 2025: The European Central Bank (“ECB”) issues an opinion expressing support for the proposals, with some suggested modifications to the European Commission’s original proposals. 11 December 2025: Draft report tabled in the European Parliament’s Economic and Monetary Affairs Committee (“ECON”). 19 December 2025: Council of the EU reaches agreement on its general approach / position (the “Council Position”). From the perspective of market participants in securitisation transactions, the Council Position has been viewed as containing some suggested amendments to the initial legislative proposals which are seen as positive. Late January 2026: Amendments tabled in the European Parliament. 21 May 2026: European Parliament reaches agreement on its general approach / position (the “Parliament Position”). In a number of respects, the Parliament Position contains compromise approaches as between the initial securitisation legislative proposals published by the European Commission and the Council Position.

Who are the key institutional decision-makers?

Council of the EU: Minister Simon Harris (Ireland) — responsible at political level during the Irish Presidency from July 2026 onwards, and is therefore now the Council of the EU’s lead minister as trilogue negotiations are actively underway. Working Party on Financial Services and Banking Union — technical-level deliberations. Economic and Financial Affairs Council (“ECOFIN”) — provides political direction. European Commission: Commissioner Maria Luís Albuquerque (EPP/Portugal) — the Commissioner responsible for taking the legislation forward. European Parliament: Economic and Monetary Affairs Committee (“ECON”) — lead committee. Ralf Seekatz (EPP/Germany) — Rapporteur, leading work on both legislative files on behalf of ECON.

What amendments to the European Commission’s legislative proposals are the Council of the EU and the European Parliament proposing?

The Council Position and the Parliament Position contain some suggested amendments to the legislative proposals, including the following: 2025/0826(COD) – Definition of Public Securitisation: The Council Position and the Parliament Position both remove the expanded definition of ‘public securitisation’ proposed by the European Commission. 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. 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”. 2025/0826(COD) – Sanctions: The European Commission proposed extending the existing administrative sanctions regime 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. 2025/0826(COD) – Third Country Securitisations: The Council Position and the Parliament Position effectively require that non-EU issuers of securitisation transactions to EU investors need to meet “substantively equivalent” disclosure requirements to those applicable to EU issuers. However, they also remove the requirement for EU investors to verify strict compliance with the mandated disclosure templates by non-EU sell side parties issuing to EU investors. This proposed amendment was not contemplated by the European Commission. 2025/0825(COD) – Prudential Legislation – Definition of Senior: The Council Position and the Parliament Position reverse the changes to the definition of “senior” proposed by the European Commission. The European Commission proposed adding a time-varying element to the definition by requiring a minimum attachment point moving with losses of underlying assets. However, the Council Position and the Parliament Position would ensure that the seniority test will remain static over the life of a securitisation transaction. 2025/0826(COD) – 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. 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’. These proposed amendments were not contemplated by the European Commission.

The EU securitisation framework review

Author(s)

Alan Keating

Co-author(s)

Expertise

Date

19/08/2026

In the European Commission’s Work Programme 2025, it was announced that the EU’s securitisation framework would be reviewed, with a legislative proposal consequently expected.

What is the EU securitisation framework review?

On 17 June 2025, the European Commission put forward two proposals to amend the securitisation framework, aiming to “remove undue issuance and investment barriers” in the securitisation market.

The two proposals are:

(i) a General Framework Regulation for securitisation and creating a specific framework for simple, transparent and standardised securitisation (2025/0826(COD)); and

(ii) amendments to the Capital Requirements Regulation regarding prudential requirements for credit institutions as regards requirements for securitisation exposures (2025/0825(COD)).

Overall, the proposals have been broadly welcomed as a measure to boost the EU’s Capital Markets Union in a competitive global sector. However, concerns have been raised from both the European Parliament and the Council of the EU about maintaining a secure regulatory framework to ensure safeguards in this area. Ensuring a balanced final agreement that takes account of the need for innovation alongside adequate safeguards will be key to reaching final adoption of the legislation.

You can read more about these legislative proposals in our previous insights – in relation to the initial legislative proposals, the Council of the EU’s position on the European Commission’s initial legislative proposals and the European Parliament’s position on the European Commission’s initial legislative proposals.

There are references throughout this article to the EU’s Capital Market Union (“CMU”) proposals and the EU’s Savings and Investments Union (“SIU”) proposals. While the CMU proposals and the SIU proposals are not the same thing, these securitisation legislative proposals fit into both sets of wider proposals and so it is appropriate to refer to one or both of them interchangeably.

Who is affected by the EU securitisation framework review?

The EU securitisation framework review 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.

At a glance: the EU securitisation framework review

What it is	A review and amendment of the EU’s existing securitisation framework, comprising two legislative proposals aimed at removing undue issuance and investment barriers in the securitisation market.
The legal instruments	Two regulations amending the securitisation framework, proceeding via the ordinary legislative procedure: (i) a General Framework Regulation (2025/0826(COD)); and (ii) amendments to prudential requirements for credit institutions as regards securitisation exposures (2025/0825(COD)).
Common name	EU securitisation framework review.
Who it targets	A wide group of stakeholders, including issuers, originators, sponsors and arrangers of securitisation transactions (including financial institutions and lenders) and investors in securitisation transactions, as well as supervisory and regulatory authorities who will play an important role in ensuring the legislation is applied correctly.
Proposal date	Proposals published on 17 June 2025.
Current stage	The Council of the EU agreed its position on 19 December 2025. The European Parliament subsequently finalised its position in May 2026. Trilogue negotiations are now underway under the Irish Presidency of the Council of the EU.
Key institutional lead	Commissioner Maria Luís Albuquerque (EPP / Portugal)
Matheson key contacts	Alan Keating and John Adams

What does this mean for your business?

Trilogue negotiations are actively underway under the Irish Presidency. The following points are most relevant at this stage:

Engage with the trilogue process now. The balance struck between market-opening measures and safeguards will directly affect the operational and commercial parameters of the revised framework. Stakeholders with a material interest in the outcome should consider engaging through trade associations and industry bodies during this window, whilst the file remains open to influence.
Assess implications for issuance and investment strategies. The proposals are designed to remove undue issuance and investment barriers in the securitisation market. Market participants should begin assessing how the anticipated changes might affect their existing securitisation programmes, investment mandates, and due diligence obligations, while recognising that the final text is not yet confirmed.
Review prudential exposure under the amended framework. The second proposal directly amends prudential requirements for credit institutions as regards requirements for securitisation exposures. Credit institutions should engage their regulatory capital teams now to model potential impacts under a range of plausible final calibrations, rather than waiting for a final text.
Engage with the STS framework developments. The proposals include an amended framework for STS securitisation. Originators and sponsors active in the STS market should follow closely how the STS eligibility criteria and labelling requirements are adjusted, as these will affect both market access and investor appetite.
Plan for implementation lead-in time. Even following political agreement, implementing measures and any consequential amendments to delegated and implementing acts will require additional time before the revised framework becomes fully operational. Those impacted by the EU securitisation framework review should plan for a period of transition and should begin assessing systems, documentation, and compliance infrastructure requirements now, rather than awaiting formal adoption.

What are the key legal and political challenges?

Balancing market development with investor protection safeguards remains the central challenge, now being tested in trilogues. Whilst the proposals have been broadly welcomed as a measure to boost the EU’s CMU, concerns have been raised from both the European Parliament and the Council of the EU about maintaining a secure regulatory framework to ensure adequate safeguards. With both institutions having now confirmed their positions, the degree of convergence between them on this fundamental tension will define the trilogues.

Maintaining STS integrity while broadening market access is technically complex. The proposals include a specific amended framework for STS securitisation, which must retain its value as a quality label whilst the broader regime is liberalised. Striking the right balance will be a key technical negotiating issue.

Prudential calibration for credit institutions requires careful design. The second proposal amends prudential requirements for credit institutions as regards requirements for securitisation exposures. Ensuring that capital requirements are appropriately calibrated, neither creating undue barriers nor generating systemic risk will be a complex technical challenge, particularly given the ECB’s role in supervising significant institutions.

ECB input provides a technical reference point for trilogue negotiations. In November 2025, the ECB issued an opinion stating its support for the proposals but with some suggestions for modification to the European Commission’s original proposals. How the co-legislators have responded to the ECB’s recommendations in their respective positions and how the trilogues resolve any divergence, will be a live question in negotiations. This is particularly the case for the second proposal amending prudential requirements for credit institutions.

Presidency sequencing creates a tight window for finalisation. With trilogues now underway under the Irish Presidency, the window to reach final agreement before the end of 2026 is defined. Efficient trilogue management and early alignment on the most contested provisions will be essential. Two trilogue meetings have already taken place with the next one scheduled for 29 September 2026.

Frequently Asked Questions

The European Commission’s core objective is to amend the existing securitisation framework to remove undue issuance and investment barriers in the securitisation market.

The securitisation review forms part of the European Commission’s broader ambition to deepen and integrate EU capital markets, increase the availability of financing for businesses, and ensure the EU remains competitive with other global financial centres.

What the European Commission is trying to achieve	How this is reflected in the legislative proposals / might look in practice
Remove undue issuance and investment barriers in the securitisation market.	Revised criteria and simplified procedural requirements for originating and investing in securitisation instruments.
Boost the EU’s CMU in a competitive global sector.	A more streamlined and internationally competitive EU securitisation market, better able to channel capital to the real economy.
Maintain and strengthen the framework for simple, transparent and standardised (“STS”) securitisation.	A dedicated STS framework sitting within the broader general securitisation regime, providing higher-quality instruments with clearer regulatory treatment.
Update prudential requirements for credit institutions regarding securitisation exposures.	Amendments to capital requirements rules to ensure prudential treatment is calibrated appropriately to revised market conditions.
Ensure adequate safeguards are maintained alongside market development.	Robust risk retention, transparency and due diligence obligations retained and potentially strengthened alongside market-opening measures.

17 June 2025: European Commission publishes two legislative proposals to amend the securitisation framework.
25 June 2025: Technical deliberations commence in the Council of the EU’s Working Party on Financial Services and Banking Union.
November 2025: The European Central Bank (“ECB”) issues an opinion expressing support for the proposals, with some suggested modifications to the European Commission’s original proposals.
11 December 2025: Draft report tabled in the European Parliament’s Economic and Monetary Affairs Committee (“ECON”).
19 December 2025: Council of the EU reaches agreement on its general approach / position (the “Council Position”). From the perspective of market participants in securitisation transactions, the Council Position has been viewed as containing some suggested amendments to the initial legislative proposals which are seen as positive.
Late January 2026: Amendments tabled in the European Parliament.
21 May 2026: European Parliament reaches agreement on its general approach / position (the “Parliament Position”). In a number of respects, the Parliament Position contains compromise approaches as between the initial securitisation legislative proposals published by the European Commission and the Council Position.

The proposals have been framed as a measure to boost the EU’s CMU in a competitive global sector and should be read alongside other CMU-related files progressing through the legislative cycle.

Securitisation is a key financing tool that, when functioning effectively, allows lenders to convert illiquid assets into tradeable securities, freeing up capital to extend further credit to households and businesses. A well-functioning EU securitisation market is therefore critical to the broader SIU / CMU agenda of deepening capital markets, reducing over-reliance on bank financing, and mobilising private capital for investment.

Practitioners advising clients in this space should monitor other CMU / SIU files in parallel with the securitisation review, as developments in one file may influence the other, particularly around investor protection standards, disclosure frameworks, and the treatment of securitisation instruments under forthcoming investment product rules.

Council of the EU:

Minister Simon Harris (Ireland) — responsible at political level during the Irish Presidency from July 2026 onwards, and is therefore now the Council of the EU’s lead minister as trilogue negotiations are actively underway.
Working Party on Financial Services and Banking Union — technical-level deliberations.
Economic and Financial Affairs Council (“ECOFIN”) — provides political direction.

European Commission:

Commissioner Maria Luís Albuquerque (EPP/Portugal) — the Commissioner responsible for taking the legislation forward.

European Parliament:

Economic and Monetary Affairs Committee (“ECON”) — lead committee.
Ralf Seekatz (EPP/Germany) — Rapporteur, leading work on both legislative files on behalf of ECON.

The Council Position and the Parliament Position contain some suggested amendments to the legislative proposals, including the following:

2025/0826(COD) – Definition of Public Securitisation: The Council Position and the Parliament Position both remove the expanded definition of ‘public securitisation’ proposed by the European Commission. 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. 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”.
2025/0826(COD) – Sanctions: The European Commission proposed extending the existing administrative sanctions regime 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.
2025/0826(COD) – Third Country Securitisations: The Council Position and the Parliament Position effectively require that non-EU issuers of securitisation transactions to EU investors need to meet “substantively equivalent” disclosure requirements to those applicable to EU issuers. However, they also remove the requirement for EU investors to verify strict compliance with the mandated disclosure templates by non-EU sell side parties issuing to EU investors. This proposed amendment was not contemplated by the European Commission.
2025/0825(COD) – Prudential Legislation – Definition of Senior: The Council Position and the Parliament Position reverse the changes to the definition of “senior” proposed by the European Commission. The European Commission proposed adding a time-varying element to the definition by requiring a minimum attachment point moving with losses of underlying assets. However, the Council Position and the Parliament Position would ensure that the seniority test will remain static over the life of a securitisation transaction.
2025/0826(COD) – 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. 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’. These proposed amendments were not contemplated by the European Commission.