Matheson EU Legislative Insights
Expert analysis of the EU legislation shaping Ireland’s Presidency agenda.
Matheson EU Legislative Insights is a fortnightly update focusing on key aspects of the legislative agenda during the course of Ireland’s Presidency of the Council of the European Union.
Every two weeks, Matheson experts will review a key piece of legislation to provide an “at-a-glance” summary of its strategic context, objectives and implications. Should you have any queries in respect of the contents of the update, please do not hesitate to contact your usual Matheson LLP contact or any member of our team detailed below.
In focus: the EU securitisation framework review
What is the EU securitisation framework review?
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.
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.
