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Specific sustainable securitisation framework? EU Commission agrees still no need for one yet.

The EU Commission’s October report on the functioning of the Securitisation Regulation confirms the approach set out by the EBA in its March paper (read more about that paper here): that the development of a dedicated framework for green "true sale" securitisations, green synthetic securitisations or social securitisations would be premature at this juncture.

Instead, the Commission supports the EBA's recommendations to:

  • amend the proposal for the EU Green Bond Standard Regulation (which applies to capital market products generally) such that it applies to securitisations in a manner more suitable to that type of financing; for example, by imposing the requirements of the proposed EU Green Bond Standard Regulation on the originator rather than the securitisation vehicle, such that (among other things) the originator's use of the issuance proceeds must meet the "green" criteria (even though this may result in the securitised assets themselves not being “green”);
  • amend the EU Securitisation Regulation to extend voluntary disclosures regarding the principal adverse impact of the underlying securitised assets on ESG factors to all securitisations, rather than only to those which qualify as simple, transparent and standardised (STS) securitisations, as is the case at present; and
  • consider making PAI disclosures mandatory in the medium term once the EU sustainable securitisation market has further matured.
The Commission agrees with the EBA that, at least in the short and medium term, there is no case for creating a dedicated sustainability label for securitisations... and stands ready to assist with the work on specifying the details of securitisation within the EuGBS framework


bonds, sustainable finance, eu-wide, blog posts