The European Commission has published a summary of the responses to its consultation on the functioning of the securitisation regulation (see TSI kompakt from 4 December 2024). The 12-page document provides an overview of the feedback received from various stakeholders.
The key points from the EU Commission’s report
Below are the key findings from the consultation:
- The Commission received around 130 responses, primarily from market participants (42%) and associations (34%).
- While the European securitisation framework has contributed to standardisation, it has not helped to promote the European securitisation market.
- The existing securitisation regulation poses a significant barrier to market entry for SMEs.
- Market participants believe that due diligence requirements should be streamlined into a principles-based approach. Investors should be able to rely on STS verification.
- A majority support simplifying the disclosure templates for private securitisations in favour of a uniform aggregated reporting format, as ESMA has proposed in principle (see TSI kompakt from 17 February).
- Supervision should be coordinated more efficiently, as supervisory practices remain too fragmented.
- The vast majority does not see STS as having the potential to promote the securitisation market.
- While there are a few dissenting opinions, most respondents support the creation of a European securitisation platform – though they agree that this should be addressed at a later stage.
- There is broad consensus on capital requirements: from a market perspective, these should be urgently reduced for both banks (CRR) and insurance companies (Solvency II).
- More than half of respondents view the current securitisation regulation as a disadvantage for European competitiveness.
Assessment and outlook
The results are unsurprising, as the key points have been addressed repeatedly in recent years. The strong consensus on reducing capital requirements as a crucial factor in promoting the securitisation market is a significant outcome of the consultation. We advocate for discussing this issue further in the political process in Brussels, alongside the role banks can play in strengthening securitisation markets. The EU Commission’s summary of the consultation could support this process.