FESE Position Paper on the Securitisation Review

FESE fully supports the European Commission’s initiative to review the EU securitisation framework and revive it as a vital building block for the success of the SIU project. FESE recognises the potential of a more effective securitisation market to support capital redeployment in favour of economic growth. However, a proper balance must be struck between maintaining financial stability and avoiding regulatory complexity. Following the Commission’s proposed measures, FESE would like to raise some concerns on the definition of public securitisations, and put forward some proposals that could contribute to the policy objectives of reviving the securitisation framework, whilst protecting the investors and financial stability.

The paper underlines the risk of misclassifying ‘public’ vs. ‘private’ securitisations, as this could reduce the attractiveness of EU venues for issuers of private securitisations, contribute to a shift away from EU venues, decrease regulatory transparency of the securitisations market, and negatively impact the competitiveness of European capital markets. In addition, the Commission proposal runs the risk of overextending the definition of public securitisations by capturing a significant number of transactions that are, in essence, private. This would result in unwarranted regulatory complexity and increased compliance costs.

To avoid these roadblocks, FESE recommends (i) the removal of the second trigger (admission to trading on a Union-regulated market, an MTF or an OTF), as this is not a good indicator of the private or public nature of a transaction; and (ii) introducing qualitative and quantitative dimensions to the criteria in Art. 2(32)(c). These adjustments would allow the definition of public securitisation to be grounded in clearer, risk-based criteria that reflect the actual nature and distribution intent of the transaction.