The Joint Committee (JC) of the European Supervisory Authorities (ESAs), comprising the European Banking Authority (EBA), European Securities and Markets Authority (ESMA), and European Insurance and Occupational Pensions Authority (EIOPA) has published an evaluation report on the functioning of the EU Securitisation Regulation (SECR). The evaluation serves to assess the extent to which the SECR has achieved its policy objectives since its implementation in 2019, and to provide legislative recommendations to the European Commission (EC).
The publication of this report coincides with the EC’s examination of the securitisation regulatory framework, including the SECR. EU securitisation has recently become a topic of priority, highlighted in reports by French economist Christian Noyer, and former Italian prime ministers Enrico Letta and Mario Draghi. Proponents believe that securitisation is important for achieving the Saving and Investment Union (SIU) within the EU and safeguarding the financial stability of the region.
Compared to the 2021 evaluation, this report is more streamlined, focusing on “recommendations to enhance the functioning of the SECR and, where applicable, to simplify the supervisory framework to support the sound and robust development of the securitisation market in the future”.
The report presents seven key recommendations: clarifying the scope of the securitisation regulation; broadening the definition of public securitisation; introducing proportionality in due diligence requirements; simplifying transparency and reporting requirements; targeted changes to the simple, transparent, and standardised (STS) framework; clarifying risk retention rules; and promoting greater supervisory consistency across Europe.
