One week after the report of the EU Parliament’s rapporteur (see TSIkompakt article of 12 December), the European Council has now adopted its position on the European Commission’s proposals to revise the Securitisation Regulation. Unlike the Parliament’s position, the Council’s position is final. The proposals go beyond those of the European Commission but remain behind the provisional positions of the EP rapporteur.
Key Points of the European Council
Below we outline the most significant proposed adjustments by the European Council:
CRR:
- Withdrawal of the new definition of senior positions proposed by the Commission (in parallel with the Parliament’s proposal).
- Determination of the resilience criterion only at the time of transaction issuance (in parallel with the Parliament’s proposal).
- Targeted adjustments to the resilience criterion (exemptions for Auto ABS and Trade Receivables under ERBA).
- Reduction of risk-weight floors, but no reduction of p-factors.
- Abolition of the differentiation between originators or sponsors and investors, at least for STS transactions.
SECR:
- The proposed amendment to the definition of public securitisations is withdrawn (in parallel with the Parliament’s proposal).
- Due diligence relief for EU investors in third-country transactions (no longer mandatory application of ESMA templates).
- No material changes to the European Commission’s proposals regarding Article 7 (transparency requirements).
- Attempt to make the criteria for insurers as STS-compliant guarantee providers for synthetic securitisations more practical and market-oriented.
- Withdrawal of the additional sanctions for investors.
The Council’s proposals therefore go further than the Parliament’s adjustments in certain areas of the Securitisation Regulation (in particular with regard to sanctions and third-country transactions) but overall remain significantly more conservative—especially with respect to the calibration of risk weights.
TSI and the German Banking Industry Committee (Deutsche Kreditwirtschaft) have also published a joint press release on the European Council’s position:
To the press release
Next Steps
An intensive process within the EU Council, which extended throughout the autumn, has now come to an end. The next step is to await the European Parliament’s final position before the trilogue can begin. This is expected in May 2026.
On the Council’s proposals: