For nearly a year, the securitisation industry in the EU has been closely monitoring developments in Brussels. However, the United Kingdom is also advancing its post-Brexit securitisation framework, adopting approaches that – from a practitioner’s perspective – could provide the UK market with a long-term competitive advantage over the EU (see also TSI kompakt, 17 February 2026). Key elements include:
- A principles-based approach adopted by the UK’s supervisory authorities, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA);
- The permanent recognition of the EU Simple, Transparent, and Standardised (STS) label in the UK, as confirmed by The Securitisation (Overseas STS Equivalence) (European Union, Iceland, Liechtenstein and Norway) Regulations 2026.
The Bank of England has now published an article endorsing the principles-based, holistic approach of the PRA and FCA.
Key Statements from the Bank of England
- Regulation must strike a balance: it should provide market flexibility while mitigating the risks that contributed to the financial crisis.
- Securitisation enables banks to access additional funding, transfer risks from their balance sheets to capital markets, support lending to businesses and households, and offer investors additional investment opportunities.
- With regard to planned regulatory adjustments, the Bank of England confirms that:
- Capital requirements should be more closely aligned with actual risk, enhancing competitiveness without compromising financial stability;
- Documentation, transparency, and due diligence requirements should be simplified and made more principles-based;
- Cross-border investments should be facilitated, and unnecessary barriers to investing in non-UK securitisations should be removed.
Conclusion
The UK is pursuing a path of deregulation and market openness. This approach has not been as clearly evident in the EU to date. The UK’s framework could now increase pressure on Brussels to implement bold reforms, particularly in light of the permanent recognition of the EU STS label under UK law.