The new harmonised securitisation rules, which will apply as of 1 January, are an important building block of the Capital Markets Union. They will help provide additional funding sources for companies, strengthen banks' ability to support the economy and spread risks across market participants, while avoiding the excesses that led to the financial crisis.
Drawing heavily on the work of the international supervisory community, the new Securitisation Regulation creates common rules and sets the criteria for simple, transparent and standardised (STS) securitisation in the EU. These are a new class of high-quality securitisation. The new rules will make it easier to issue and invest in securitisations in the EU and will help ensure financial stability and investor protection.
Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union, said: "This legislation is one of the cornerstones of the Capital Markets Union, the Commission's pivotal project to build a single market for capital in the EU. It will help build a sound and safe securitisation market in the EU, bringing real benefits to investment, jobs and growth. It will free up bank lending so that more financing can go towards supporting our companies and households."
This EU-wide initiative on 'high-quality' securitisation will ensure high standards of process, legal certainty and comparability across securitisation instruments through a higher degree of standardisation of products. This will notably increase the transparency, consistency and availability of key information for investors, including in the area of SME loans, and increase liquidity. In turn, this should facilitate the issuance of securitised products and allow institutional investors to perform a thorough due diligence, which helps to identify those products that match their asset diversification, return and duration needs.
These rules will become directly applicable in all EU Member as of 1 January 2019.
Full press release
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