Securitisation Regulation

European Union (EU).

The EU Securitisation Regulation (EU) 2017/2402 applies generally to securitisations issued on or after 1 January 2019.

The Securitisation Regulation legislative package introduced severe penalties (including fines of up to 10% of annual net turnover on a consolidated basis) for non-compliance applied to issuers, original lenders, originators and sponsors.

It repealed the main securitisation provisions in the formerly separate legislation for banks (the Capital Requirements Regulation, or "CRR"), insurers (Solvency II) and fund managers (the Alternative Investment Fund Managers Directive (AIFMD) regime).

It replaced them with a harmonised securitisation regime applicable to all institutional investors including UCITS and pension funds.

Treasurers need to sharpen focus on identifying securitisation activities and implementing robust process to ensure compliance with both the Securitisation Regulation and the related Prospectus Regulation.

The Securitisation Regulation also introduced a concept of "simple, transparent and standardised" (or "STS") securitisations that are regulated more lightly than other securitisations.

See also

• Capital Requirements Regulation
• CDO
• CMBS
• Covered bond
• Factoring
• Issuer
• Originator
• Prospectus
• Prospectus Regulation
• Securitisation
• Securitisation special purpose vehicle
• Securitisation swap
• Security
• Significant Risk Transfer
• Solvency II
• Sponsor
• SSPE
• Sukuk
• Undertaking for collective investments in transferable securities
• Whole business securitisation

Other resource

The EU Securitisation Regulation – Do I need to worry?