Securitisation Regulation 2.0

Where the file stands

The Commission tabled two instruments on 17 June 2025: COM(2025) 825 amending the CRR, and COM(2025) 826 amending the Securitisation Regulation. They travel together, and the political economy of the file is that the capital relief in the first is the price of the process burden in the second.

The deal of 21 October 2026

Late in the evening of 21 October 2026, in Strasbourg, Council and Parliament reached provisional political agreement on both instruments. The Council’s press release confirms the architecture: capital requirements re-calibrated on a risk-sensitive basis, with materially lower requirements for low-risk positions; a new “resilient” category alongside a strengthened STS label; EU-level supervision of the third-party verifiers of STS compliance, with convergence of national practice; reduced administrative burdens; raised UCITS investment limits; and targeted STS changes admitting insurers and reinsurers to the synthetic market and opening securitisation to projects before their operational phase.

What moved in the endgame, per press reporting: the capital rules were adjusted against the Commission’s proposal, the supervisory framework was re-shaped, and the sanctions regime for due-diligence breaches was watered down (MLex, 21 October 2026). The compromise texts are not yet public — the figures on this page drawn from the proposals and the negotiating positions should be read as the last known state, not as the outcome.

First reactions. TSI, in its first assessment (22 October 2026), locates the capital relief chiefly in senior STS tranches, welcomes the transparency improvements and the political tailwind — the first since 2008 — but maintains its structural critique: the reform buys its relief with added complexity, its main beneficiaries will likely be multinational banks in the large established markets, and the chance to open securitisation to smaller banks and new entrants across the EU-27 by simplifying the rulebook was not taken. The two-tier concern, in other words, survives the deal intact.

What changes in the Regulation

Due diligence. Article 5(1)(b) goes: an institutional investor will no longer have to verify that the originator or sponsor has made the Article 7 information available. In its place come a check on third-country originators against a registered securitisation repository, a fifteen-calendar-day window for secondary-market purchases, and — new in Article 5(4a) — a full exemption where the position is fully guaranteed by a multilateral development bank or by a promotional institution holding a first-loss piece of at least 15%. Article 5(5) permits delegation of the diligence itself while leaving liability with the delegating party. The Council adds that investors may rely on supervised third-party verifiers in repeat transactions.

Transparency. Streamlined templates for ABCP and highly granular short-term portfolios, mandatory and voluntary fields separated, and an expected reduction of at least 35% in the number of compulsory fields. Private securitisations move to a simplified reporting channel modelled on the SSM guide. There is no grandfathering for transactions already closed — Brandt criticises this expressly, and it reaches every live private CRE structure.

Public and private. The Commission proposed a definition turning on a prospectus, admission to a regulated market, MTF or OTF, and non-negotiable terms. The Council reduced it to the prospectus requirement alone. One criterion now decides which transparency regime a private CRE deal falls into.

Risk retention. A new Article 6(5a) exempts securitisations guaranteed by promotional institutions. For CLO retention vehicles, income from securitised positions is to be capped at 50%.

Synthetic securitisation. EU insurers and reinsurers become eligible protection sellers under Articles 26b and 26e, subject to credit quality step 2 or better, assets above EUR 20 bn, and authorisation in at least two non-life classes. Protection premiums are to be tied to tranche size and risk rather than to the nominal amount; synthetic excess spread becomes available to non-IRB institutions by reference to the loss amounts of Article 158 CRR; and restructured positions attract their own transparency duty under Article 26b(11). These points are picked up on the synthetic securitisation and SRT pages.

Supervision. A securitisation sub-committee under EBA leadership (Article 36(3)); continuing supervision of independent verifiers (Article 28(1)); STS supervision stays national; the ESRB gains a data-sharing role for macroprudential observation of unfunded synthetic protection.

What changes in the CRR

Significant risk transfer. The mezzanine and first-loss tests of Article 245(2) give way to a principles-based test: at least 50% of the unexpected loss on the securitised portfolio must be transferred to third parties. The individual approvals under Articles 244(3) and 245(3) fall away. Treated at length on the SRT page.

Risk-weight floors. Article 259 acquires a formula — 10% × RWA (Article 255) × 12.5% — with minimum thresholds of 5% for an STS originator, 10% for a non-STS originator and 12% for a non-STS investor. Positions qualifying as “resilient” sit at 7% and 12%, subject to a 2% concentration limit. The SEC-ERBA fallback risk weights are 10% for STS and 15% for non-STS.

The p-factor. Under SEC-SA: 0.6 for senior originator or sponsor positions in non-STS transactions, 1 for other non-STS, 0.3 for senior STS and 0.5 for other STS. Brandt's observation deserves to be read twice — some of these values sit above the transitional treatment of Article 465(13) CRR. For those positions the reform is a tightening, not a relief, and a bank modelling its CRE book against today's transitional numbers will find the answer moves in the wrong direction.

Liquidity. The LCR haircut falls from 35% to 25%, and as far as 15% for larger tranches of resilient securitisations. Credit quality steps 1 to 7 become eligible as Level 2B HQLA and the five-year cap on weighted average life disappears, with EBA monitoring over four years. For the CRE bond market this is the quiet part of the reform that most directly affects who can hold the paper.

The four points still open

Investor-side sanctions. The Commission proposed extending the sanctions regime to negligent and intentional breaches of investor due diligence (Article 32(1)(i)). The Council struck it out; Parliament wants it kept, together with a lead-supervisor concept. EFAMA, AFME, AFG and the German banking industry object that it duplicates the UCITS and AIFMD regimes and is calibrated disproportionately. Deferred on 13 July 2026 with a mandate to the Commission. Outcome: the sanctions regime for due-diligence breaches was, in MLex’s words, watered down in the final compromise.

Resilient securitisation. The category sits below STS with its own capital and liquidity treatment. Parliament wants it deleted outright as conceptually confusing and dilutive of the STS brand; the Council and the ECB want it kept. Its granularity requirements largely exclude CLOs and leveraged-loan securitisations; auto, leasing and consumer credit were carved back in. Outcome: the category survives — the Council press release confirms a new “resilient” category alongside a strengthened STS label; Parliament’s deletion demand did not prevail. Calibration pending the final texts.

The UCITS single-issuer limit. Today 10%. The Council proposed 50% for public securitisations, Parliament 70%, the Irish Presidency offered 40%, 30% or 20%, and a Spanish non-paper proposed abolition. A separate 10% to 15% increase appears in the Market Integration Package. Whether these are the same measure at different stages or two measures is not clear from the sources — which is itself worth knowing before quoting a number. Outcome: limits are raised; the figure is not yet public.

Third-country STS equivalence. Deleted in full. Mayer Brown and TSI read this as protectionist and, for EU investors looking at non-EU collateral, competitively damaging. Outcome: not addressed in the press release; open until the texts are released.

What it means for CRE

None of the legislative material addresses commercial real estate as such. The asset classes named in the debate are auto, leasing, consumer and SME credit, and residential mortgages on the capital side. The translation has to be made, and it runs along four lines.

Private deals carry the burden. European CRE securitisation is disproportionately private. The definitional narrowing to the prospectus test, the new private reporting channel and the absence of grandfathering therefore land on this market harder than on the public ABS market that dominates the debate.

The relief is thinner than the headline. A EUR 310 m annual saving and a 35% reduction in mandatory fields are process costs. Where the p-factor rises above the transitional treatment, the capital arithmetic for a non-STS CRE position moves against the bank. CRE portfolios rarely reach STS, and the granularity thresholds of the resilient category are not written with a twelve-loan conduit in mind.

Insurers as protection sellers is the real opening. Widening the pool of eligible sellers under Articles 26b and 26e, together with the unfunded credit protection threshold moving from EUR 15 bn to EUR 10 bn, matters more to a synthetic CRE trade than any of the transparency changes.

And the honest conclusion is Huertas's. Without a recalibration of the insurance treatment under Solvency II, the reform leaves the market “safer, clearer — but not materially larger”. For a market whose refinancing wall is measured in hundreds of billions, that is the sentence everything else hangs on.

What the 21 October deal confirms for CRE. The two levers that matter most to CRE both survived: the resilient category, with its capital and LCR advantages, granularity permitting — and insurers as protection sellers in synthetic trades. The press release also singles out securitisations financing pre-operational projects: read data centres and infrastructure-adjacent collateral before stabilisation. Whether a twelve-loan CRE conduit ever reaches the new categories is a question only the final calibration can answer.

Last reviewed: 22 October 2026. Sources are collected on Resources; short definitions of the technical terms used on this page on the Glossary. Related: Basel 3.1 / CRR3, SRT, synthetic securitisation.