April 1, 2026

UK securitisation reform: A more proportionate second act

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Key takeaways

The UK FCA's and PRA's consultations for a second batch of securitisation reforms propose significant changes including more principles-based due diligence and transparency, removal of the distinction between private and public securitisations for most requirements, elimination of mandatory securitisation repository reporting and transaction summaries, options for resecuritisation, and a new L-shaped risk retention and discussion as to in-scope transactions amongst other measures. By easing prescriptive requirements, the regulators offer UK market participants more flexibility and reduced costs, while supporting wider investment including in third-country transactions.

The reforms mark a notable departure from the EU's recent direction, although some mitigating measures are intended to limit divergence. The rules are expected to be finalised by the end of 2026 and to apply from Q2 2027.

On 17 February 2026, the UK Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) (together the Regulators) each published a consultation paper, CP26/6: Rules for reforming the UK Securitisation Framework and CP2/26 – Reforms to securitisation requirements (the Consultations), proposing significant reforms to the UK securitisation framework (UK Securitisation Framework). These follow the 2024 reforms that introduced the new UK Securitisation Framework 1. We await publication of a related statutory instrument (SI) by His Majesty’s Treasury (HMT) to complete the picture but expect this will align with the Regulators’ proposals. The proposals have been broadly welcomed by the market.

This second batch of reforms promises an ambitious overhaul of key elements of the existing UK regime, reflecting both extensive market feedback and broader policy objectives. A central focus is the recalibration of prescriptive and often burdensome due diligence and transparency requirements, while preserving core safeguards underpinning the securitisation market since the Global Financial Crisis of 2008 (GFC). By moving away from highly prescriptive rules, the proposals have the potential to reduce regulatory friction, incentivise investment in the UK securitisation market, lower costs for market participants and ease barriers to investment including in third‑country securitisations.

The substantive changes include more principles‑based, streamlined due diligence and transparency obligations, the removal of the distinction between private and public securitisations for most purposes, the elimination of mandatory securitisation repository reporting and transaction summaries, options for resecuritisation, a new L‑shaped risk‑retention model and a fresh assessment as to which transactions should fall within scope of the current rules. The proposals represent a marked departure from the EU’s current direction of travel following the European Commission’s package of securitisation reforms published last summer. While welcome, without similar measures in the EU or an equivalence recognition regime, the bar will effectively be set for many transactions by compliance with EU requirements. We consider below the proposed reforms including the potential impact on UK and dual or third-country transactions, where relevant. Note that we use the term “originator” to refer to originators, sponsors and original lenders, as applicable, noting that the Regulators use the term “manufacturer” in the Consultations which also includes SSPEs.

Overview of the proposals

Background

The Consultations respond directly to many outstanding issues not addressed in the 2024 reforms that introduced the current UK Securitisation Framework. This second phase also considers the UK government’s broader growth and competitiveness goals by targeting structural constraints that have long inhibited market growth, and reflecting a broader shift towards a more proportionate, clearer and outcomes‑focused approach to rule‑making in the UK.

Due diligence

The proposals represent a fundamental shift away from prescriptive verification obligations towards a simplified and principles-based risk assessment framework that affords institutional investors greater flexibility to exercise their own judgement in assessing securitisation risks in a “manner proportionate to the risk profile of the securitisation position they hold”; this will allow investors to tailor their due diligence according to the risk profile of the transaction.

This approach represents a material departure from the anticipated European direction of travel; while simplification is a shared goal between the EU and the UK, the proposals discussed in this article are more ambitious in scope.

Key proposals include:

• Due diligence prior to investment: The existing requirements to verify compliance with the UK rules (or equivalent) in relation to credit granting, transparency and risk retention are replaced with a principles-based obligation on an investor to ensure that it has a comprehensive understanding of the risks of the securitisation.Though the “sufficient information” requirement remains, institutional investors must ensure that there exists sufficient alignment of interest between the manufacturer and the investor. The requirement for investors to assess STS compliance is also removed, with this forming part of the investor's overall risk assessment rather than a standalone verification obligation. For risk retention, institutional investors must be satisfied that there is a "sufficient and appropriate alignment of commercial interest in the performance of the securitisation". Helpfully for third-country securitisations, other factors may be taken into account such as evidence of risk retention or management fees. This is particularly relevant for US CLOs, which have historically been inaccessible to UK institutional investors due to incompatibility with the existing verification requirements.

Prescriptive lists specifying required information for pre-investment and ongoing due diligence are replaced with principles-based guidance providing that information should be obtained where it is material and proportionate to the risk, size, type and holding period of the investment.
- Due diligence while holding a securitisation position: The current detailed credit ‑ quality monitoring rules are downgraded to guidance. Mandatory stress testing and granular internal management reporting are removed. In addition, requirements to evidence to the Regulators a comprehensive understanding of an investment are removed and instead streamlined and aligned with the existing Senior Management Arrangements, Systems and Controls (SYSC) governance requirements.
The FCA estimates annual cost savings for UK investors of approximately £7.95 million, with per-transaction due diligence costs expected to reduce by approximately 30%.

Lower barriers should increase accessibility for new and smaller investors and transactions. Enhanced access to US CLOs and third-country securitisations could improve portfolio diversification.

However, the FCA acknowledges that a principles-based approach may result in lower quality risk assessments by some investors. Some market participants also may be cautious about departing from established practices. This will no doubt be a period of adjustment both for investors and the Regulators as they adapt to evolving risk assessments.

Absent any mutual equivalence recognition by the EU, EU investors will require manufacturers to continue to comply with EU requirements. It is helpful for UK investors however that the FCA has sought to mitigate the burden on manufacturers by accepting EU underlying exposure templates as an alternative to UK templates in some cases, thereby avoiding the need to produce separate documentation for each jurisdiction.

Transparency

The Regulators propose a substantial streamlining of the transparency obligations and alignment with the Bank of England (BoE) templates, which the FCA estimates could result in market-wide annual savings of approximately £20.76 million. While the templates and reporting obligations were introduced to standardise and enhance transparency, they have not proved as helpful as anticipated by the regulators and created unnecessary inefficiencies as a one-size-fits-all approach, particularly for more esoteric or granular asset classes. The core requirement remains that investors must have sufficient information to assess investment risks but a more proportionate approach is introduced that reflects a balance of investor needs and asset class characteristics.

It is possible that the market might develop its own standards by default; the FCA explicitly contemplates that adequate market-driven reporting standards would develop in tandem with market growth for asset classes where templates are removed. For example, the CMBS market previously developed a form of template that could be resurrected. If participants are hesitant to move away from the templates, they may opt to continue to use the EU templates and/or reduce unnecessary fields or simplify them.

Key proposals include:

• Fewer and simplified templates

  • Templates removed: The underlying exposure templates for credit card receivables (and short-term highly granular exposures), commercial real estate, corporate exposures (excluding CLOs), esoteric and ABCP exposures are replaced with a principles-based approach. In addition, following industry feedback highlighting the disproportionate operational and cost burdens of applying transparency requirements to single-loan securitisations under the Mortgage Guarantee Scheme (MGS) and similar private guarantee schemes, the PRA is proposing to exempt all single-loan securitisations—whether RMBS or otherwise, and regardless of credit protection—from the requirement to use prescribed underlying exposure templates, though firms would remain subject to broader general transparency obligations.
  • Templates retained and simplified: Simplified templates remain for residential real estate, CLOs, automobile, consumer and leasing. The add-on template for non-performing exposures (SECN 11 Annex 10) is retained with limited changes. Although there is no corresponding BoE template for NPE securitisations, as the BoE does not accept NPE-backed securities as eligible collateral, the FCA has redesigned the template so that its overall format aligns with the other new SECN templates. The private securitisation notification template also remains with minor amendments. Templates must be electronic (no longer in XML format) and in a machine-readable format but format flexibility is permitted. The “no data” reporting is simplified by distinguishing between mandatory and optional fields and allowing a single “no data” option. Use of the BoE RMBS loan level data template is permitted to satisfy SECN 11 Annex 2 requirements for residential real estate, provided that any missing information is supplied in an additional tab.
  • Deletion of PRA templates and requirement to use applicable FCA templates: A single set of disclosure templates, included in the FCA Handbook, is proposed. The removal of duplication should simplify processes for the market.
  • Equivalence of EU templates: With the exception of the CLO template, the current EU templates may continue to be used where the Regulators require templates for relevant asset classes. These are subject to likely changes in the EU and the Regulators may reconsider this option at that time.
  • Development of a streamlined CLO template: A new, simplified CLO template (SECN 11 Annex 4A) is proposed, with 43% fewer data fields than the current SECN 11 and 12 Annex 4. In this case the use of an EU template would not be permitted as an alternative.
  • Disapplication of templates for investor reports and inside information/ significant event reporting: The templates SECN 11 and 12 Annexes 12, 13, 14 and 15 are removed. However, requirements to provide investor reports that meet minimum standards are retained on a principles-based approach. Where a prospectus is not required to be published, manufacturers must provide the information on inside information and significant reporting to the investors and to the Regulators.

• Extension of deadline for provision of final transaction documents The period for providing final transaction documents after closing may be extended from 15 to 30 days or by the first interest payment date, whichever is earlier.

• No obligation to report to securitisation repositories The Regulators propose, in conjunction with HMT and subject to the SI, removing the requirement to make information available via regulated securitisation repositories, noting confidentiality concerns. SECN 6 nevertheless requires information to be made available by means accessible to investors, subject to appropriate governance and controls. However, in practice, UK issuers listing in Ireland or Luxembourg may still want to file with an EU repository to allow EU investors comply more easily with Article 5(1)(e) of the EU Securitisation Regulation.

Unregulated repositories could continue to satisfy this obligation but they will no longer be regulated; this will require a legislative amendment of the current regime via the awaited SI. Many UK securitisation warehouses already use dedicated reporting platforms for the transmission of reports and information (which were already being used in parallel to the securitisation repository). To the extent these platforms remain robust enough to pass the appropriate governance and controls test, this would be a straightforward solution for many reporting frameworks.
- Simplified provision of underlying documentation The prescriptive list of documentation that must be provided is removed, allowing some discretion. However documentation essential for the understanding of the transaction, including but not limited to, where applicable, transaction documentation (except legal opinions) and risk retention information must still be disclosed. The requirement to provide a transaction summary is removed however. This is helpful, as the requirement has limited practical value given that funders typically negotiate documentation bilaterally.

The quarterly investor reports may provide data in aggregated form and there are some additional requirements to be included in those quarterly reports.
- Definitions of "public securitisation" and "private securitisation"
The distinction between public and private securitisation is removed for transparency purposes with relevant templates applying to all transactions, regardless of any classification as public or private. The FCA has adopted this approach, rather than attempting to set market-specific requirements, given the proposals for removal of mandatory reporting to regulated securitisation repositories and the simplification of underlying exposure templates. The public/private distinction is retained however for STS notification requirements and for BoE requirements. Defining what is “public” versus “private” has been a significant point of discussion in the EU, with the European Commission proposing a definition of “public securitisation” which many respondents to the proposals have felt was unworkable and which many felt artificially captured what was otherwise a private arrangement. It is still open for debate in the EU legislative deliberations whether the status quo will be.

Risk retention

The introduction of “L-shaped” risk retention for the first time provides an option for combined horizontal (first loss) and vertical (equal proportion in remaining tranches) retention, provided that the combined interest equals at least 5% of the nominal value of securitised exposures. This has long been proposed by the market and should make it easier to issue in overseas markets where this type of retention is already permitted, such as the US and Japan by providing manufacturers with greater flexibility in structuring transactions for both regulatory and investor requirements. While the Regulators have not quantified the specific benefits, enabling manufacturers to align their retention structures with international market practice could be material in supporting cross-border issuance and investment, including for UK based investors, which will be able to invest in, US originated and Japanese originated CLOs, where an L shaped risk retention structure is already available.

In the context of synthetic securitisations, the L-shaped risk retention may also be beneficial, given that a large number of first loss tranches in synthetic securitisations have, as a result of the capital charge of the underlying exposures, a detachment point below the previously-required 5% threshold and are therefore ineligible for the first loss tranche risk retention methodology. Unlike in the EU, the proposals do not provide for synthetic excess spread (SES) to be taken into account when measuring the risk retainer’s net economic interest and therefore cannot be taken into account under the L-shaped risk retention method as discussed further below.

Where there are multiple retainers, each retainer must retain the net interest in the securitisation on a pro rata basis and in the same proportion. Where L-shaped retention is used, the relevant manufacturer must retain on a pro rata basis the same percentage of the first loss tranche and of the nominal value of the other tranches sold or transferred to investors.

The EU discussions do not include, or currently anticipate, the adoption of an L-shaped retention however and so for dual EU/UK jurisdictions transactions, this would not be available as an option; therefore it is likely that L-shaped risk retention may have limited uptake, absent changes in the EU.

Resecuritisation

Limited and conditional exceptions to the general ban on resecuritisation are proposed. These changes are not expected to be material, but they may remove barriers and offer more flexibility for securitisations involving loans under schemes such as the MGS and for risk‑management purposes where the resecuritisation does not fall within the types that contributed to the GFC. More broadly, the market has long argued against an absolute ban on restricted structures that could have benefited both manufacturers and the real economy without creating prudential concerns. The reforms may therefore be helpful, but their value will remain limited without EU alignment.

The two exemptions are:

• (Exemption 1) Re-securitisations created by tranched credit protection : There were some concerns previously that certain exposures which benefited from credit protection or credit risk mitigation which inadvertently created tranching (i.e. loans underwritten under the MGS, or more generally credit insurance applied with a "first loss" excess) could not be underlying exposures in a securitisation. This limited the manufacturer's access to funding, liquidity and credit risk management. The Regulators have carved out from the ban on resecuritisation exposures which are tranched only by virtue of the credit protection afforded to them on a single exposure basis, where such resecuritisation is limited to a single round. Although this is subject to ongoing consultation, this is likely to mean that only the first securitisation of a pool of "tranched" underlying exposures would be permissible (i.e. a subsequent securitisation of such a position would still constitute a resecuritisation).

• (Exemption 2) Senior securitisation positions only: A resecuritisation of a senior securitisation position will now be permissible.
  These exemptions are subject to safeguards. They may only be applied once and not in combination with each other, nor to any further resecuritisation. In our view, the requirement that it is "only applied once" means that there cannot be subsequent re-tranching of the already re-tranched exposures. It would not, for example, prevent a resecuritisation of a senior securitisation position into three contiguous tranches at the same time. Also, the manufacturer of the resecuritisation must be PRA-authorised persons and the risk retainer of the underlying securitisation. These resecuritisations cannot qualify as STS. The PRA also expects resecuritisations benefiting from the new exemptions to be homogeneous in terms of the asset class of the underlying exposures.

The clarification that the retranching by the securitisation's originator of an issued tranche into contiguous tranches (or of contiguous issued tranches into one or a fewer number of tranches) does not constitute a resecuritisation helps to remove current uncertainty on this point. This language was already included in the Commission Delegated Regulation (EU) 2023/2175 (the Risk Retention RTS) in the EU and (as a result of the on-shoring in November 2024) in SENC 5.17.1R(4), albeit limited in both cases to a contiguous retrenching by the originator of a risk retention piece. The expansion to include this more generally in the resecuritisation definition is beneficial. There has not been an expansion to allow contiguous retranching by non-originators: that is, investors who acquire securitisation positions and want to retranche to either leverage or syndicate their exposure will need to fall within one of the other exemptions for resecuritisations.

The PRA has also proposed amendments to Article 269 of the UK Capital Requirements Regulation (CRR) on resecuritisation capital treatment that will ensure that such resecuritisations receive more favourable capital treatment (please see below).

It is worth noting that the UK Credit Rating Agency Regulation contains specific provisions governing the credit rating of re ‑ securitisations. Article 6b provides a mandatory rotation requirement for credit ratings of re ‑ securitisations every four years. The rotation requirement is designed to address concerns about conflicts of interest arising from long ‑ standing commercial relationships between issuers and credit rating agencies. Participants who want to avail themselves of these changes will need to factor in such mandatory rotation as part of their transaction structuring.

Credit-granting standards

The Regulators consider that the current wording of these rules is not sufficiently clear. There is clarification therefore that sound credit granting criteria must apply to all exposures intended to be securitised, irrespective of whether other non-securitised exposures/comparable assets exist and remain on the balance sheet. Originators, sponsors and original lenders must apply the same clearly established processes for approving and, where relevant, amending, renewing and refinancing credits. The term "non-securitised exposures" is replaced with a clearer reference to "comparable assets remaining on the [firm's] balance sheet, if any".

Non-performing exposure definition

A more consistent definition of non-performing exposure securitisation is introduced for clarification.

Further possible proposals under discussion

• Scope: Feedback is sought on whether certain transactions should be exempt from conduct rules, such as risk retention, due diligence, credit granting and transparency, where associated risks are immaterial or already mitigated through other regulation or market practice. The definition of “securitisation” will remain unchanged, as it aligns with the Basel Framework and is well established in market and legal practice . This represents a good opportunity for market participants to make the case for removing additional hurdles where, given the nature of certain transactions and wider safeguards that may be in place, applying the full UK Securitisation Framework may not be necessary. The FCA has indicated that it has not found the feedback received to date strong enough to warrant a change of the rules at this stage, but welcomes further data-led arguments. A similar suggestion had been mooted in the previous EU discussions that transactions where the parties, such as AIFMs, are subject to a separately regulatory regime, together with smaller transactions. The FCA is open to further discussion on exemptions but focusses on:

  • CLOs: Market participants have argued that CLOs should be exempt from some conduct rules as the managers are often AIFMs or seen as similar to traditional asset management and already subject to risk and due ‑ diligence requirements.In addition, investor alignment can be achieved through fees and manager track record, not only risk retention, as discussed above.
  • Whole Business Securitisations (WBSs): These transactions are operationally different from traditional securitisations and therefore arguably should be outside of the scope of the securitisation rules. Also, information asymmetry risk concerns would be expected to be lower in WBS transactions and it not clear that about the risk retention and transparency requirements are proportionate in the case of WBSs.
  • Correlation Trading Portfolios (CTPs): Market participants argue that CTPs are trading and risk ‑ management products, not true securitisations. In fact, earlier securitisation rules recognised this through more tailored treatment, which was removed after the 2019 reforms. Also, CTPs do not involve credit granting so applying current conduct requirements is not helpful and, as publicly traded indices, CTPs also have limited information ‑ asymmetry concerns.

• Data protection and confidentiality: In responses to the previous consultations on the UK Securitisation Framework, the FCA was asked to consider how confidentiality and data protection interacts with securitisation transparency rules and to recognise non ‑ UK legal requirements. The FCA has so far rejected carve-outs due to concerns that this may result in less information being provided to investors without sufficient justification. However, the FCA is seeking views whether carve-outs may be needed on cross-border transactions to comply with applicable law and remove barriers.

PRA-specific proposals

It is helpful to see that the Regulators are broadly aligned in their respective proposals. In addition, the PRA has modified the structure of its proposed rules to be more consistent with the FCA format. Although this makes sense to align with the FCA’s drafting approach, the current PRA rules follow the EU Securitisation Regulation format and numbering which has made comparison simpler. Specific PRA proposals also include:

• A new capital treatment for single loan residential mortgage securitisations under the IRB approach (private schemes including MGS): The PRA has proposed a new optional capital treatment for single loan residential mortgage securitisations under the IRB approach, applicable to loans under the MGS (as well as other similar private mortgage insurance schemes). Given the first loss nature of these schemes, these were previously held to be securitisation positions and therefore not an eligible "underlying exposure" for a subsequent securitisation. The PRA's proposal permits IRB firms to adjust the loss-given-possession component (a specific component of mortgage loss modelling, representing the financial loss the bank would realise if the property was possessed and sold following a default by the borrower) of their wider loss calculations, in a way which better reflects the economic substance of the first loss protection. The adjustment would be subject to a 5% loss-given-default input floor and would require banks to have suitable data collection, validation and governance procedures in place.
• Amendments to Article 269 on resecuritisation capital treatment: Historically, resecuritisation positions attracted significantly higher risk weights than standard securitisation positions due to their increased complexity, opacity, and the layering of credit risk that contributed to losses during the GFC. This was in addition to the ban on resecuritisation within the EU and UK (i.e. an EU/UK originator/SSPE could not issue a resecuritisation, but an EU/UK investor could in theory invest into a non-EU/UK resecuritisation and be subject to the additional capital weights). Article 269 will be amended to provide that resecuritisations exempted under the new proposals (as discussed above) are not treated as resecuritisations for the purposes of calculating risk-weighted exposure amounts. In practice, this would mean:
  1. For Exemption 1, the credit risk mitigation and/or credit protection would be disregarded for the purposes of the securitisation risk-weighting; and
  2. For Exemption 2, the underlying senior position will be treated as a pro-rata slice of the underlying unsecuritised portfolio. It is worth noting that treating the underlying senior position in this manner essentially removes the credit enhancement provided to such senior position (given it no longer benefits from the original tranching which would have given such senior position a higher attachment point). The final "resecuritisation" position could therefore in theory have a regulatory capital treatment which is even worse than the senior position. This will ensure that such less risky resecuritisations could receive more favourable capital treatment which better reflect the risk profile of these transactions, while at the same time ensuring that no arbitrage can take place by investors achieving a better risk-weighting than they would absent such resecuritisation.
• Re-introduction of provisions on forbearance and NPE definitions previously removed by HMT: This is a technical correction to ensure continuity of terms and legal and regulatory certainty.

• Changes to CRR reporting: Under the Reporting (CRR) Part of the PRA Rulebook, PRA-authorised CRR firms are required to report detailed information on their securitisation exposures on a semi-annual basis. These templates require granular transaction-level data for each securitisation, including information on the identifier of the securitisation, the modality of risk retention, exposure values, risk weights, and capital requirements. The PRA proposes the exclusion from semi-annual COREP reporting of:

• single ‑ loan retail securitisations, such as MGS loans, where full reporting is seen as disproportionate to risk; and

• qualifying securitisations under the Securitisation (CRR) Part as originators retaining exposures already have full visibility of the underlying exposures.
  Firms must still provide aggregate reporting for supervisory oversight but the changes may reduce administrative burdens and support a more proportionate reporting regime.

What was not included?

• Grandfathering and transitional relief: The Regulators have not included any grandfathering or transitional relief other than an additional 6-month period post-finalisation of the rules. As the changes are generally favourable to the market it may be considered that grandfathering and transitional provisions are not needed; however adjustments to some requirements (such as CLOs) may take time to embed. Also it could be helpful if an opt-in mechanism were introduced for the new principles-based rules that would benefit pre-November 2024 securitisations.
• No extension of STS for synthetic securitisations: Extending the STS label in the UK for synthetic securitisations, which is the case in the EU, remains off the table. However, we note that the changes introduced by the PRA’s PS19/25, which allow market participants to either opt for the existing SEC-SA formulation or to use the new formulaic p-factor (which is broadly based on the SEC-IRBA calculation and allows banks to input values to obtain a lower non-neutrality factor) is seen as an alternative to opening up the STS regime for synthetic securitisations. Please see our article Mind the Channel: The UK finalised a path towards a stand-alone Basel 3.1 regime for more information.
• Servicers as retention holders and transfer of the retention: The EU rules provide some flexibility for servicers to act as retainers transfer of the risk retention but this is not yet included in the UK rules. In addition, there is not provision for allowing transfer of the retention where the retainer, for legal reasons beyond its control and beyond the control of its shareholders, is unable to continue acting as a retainer. We note however that there is greater scope in the UK to apply for regulatory waivers in the event that a transfer is proposed.
• Environment, social and governance (ESG): Other than an optional field in the draft RMBS template, there are no new proposals for ESG disclosures.
• Synthetic excess spread: Unlike in the EU, the proposals do not provide for SES to be taken into account when measuring the risk retainer’s net economic interest, therefore impacting negatively on transaction economics as mentioned above. This also means that SES cannot be taken into account under the L-shaped risk retention method as discussed above.
• Pre-November 2024 securitisation transactions: These are grandfathered under the current UK Securitisation Framework. It remains unclear for example what information under Article 5 would be considered “substantially the same” so clarification on this would be helpful.

EU and UK Divergence

The proposals mark a clear departure from the EU’s recent direction following the European Commission’s securitisation reform package published last summer. Although the European proposals address many of the same themes, the UK approach goes much further in prioritising the removal of barriers to investment and market development. This inevitably increases the prospect of divergence from the EU framework, but the Regulators aim to balance ambition with pragmatic measures that limit unnecessary friction and costs for cross border activity.

Ultimately, without similar measures in the EU, UK transactions will need to continue to align with EU standards. It is possible however that the Consultations may yet influence future EU deliberations.

Implications for originators and investors

As regulatory proposals progress, market participants may wish to consider how existing processes and systems could be adapted to reflect the potential new requirements. This may include modifying systems to prepare for, and take advantage of, a more principles‑based approach that could free up resources and reduce costs. Prospective new entrants may wish to assess the systems and capabilities needed to comply with and assess the benefits to them of the evolving framework.

Final thoughts

The Regulators have responded to industry feedback with meaningful and welcome reforms to broaden investment and support a wider UK securitisation market. The move towards a more durable, forward looking framework may reduce costs and burdens, though the impact on market revival, particularly given UK EU divergence, remains uncertain.

Next steps and timing

• Consultation timing: The consultation closes on 18 May 2026. The Regulators actively seek feedback from market participants during this time.
• HMT SI is expected: We expect the SI from HMT to amend The Securitisation Regulations 2024 to enable the FCA and PRA to implement the proposed reforms, including potential alignment of due diligence rules for occupational pension schemes and modification of requirements relating to the regulation of securitisation repositories.
• Extension of the current EU STS recognition: Further steps are needed to extend the current EU STS recognition which is due to expire in June 2026. We do not know yet if this will be via a further extension or if a wider recognition regime may be adopted.
• Final FCA and PRA rules: The Regulators aim to finalise the changes to the rules in the second half of 2026. This would then be subject to a 6-month transition period before the rules enter into force, with the earliest implementation expected in Q2 in 2027.
• Impact of EU reforms: The recognition of the EU disclosure templates could be impacted by future EU changes. The FCA may review its approach at that time.

• Ongoing monitoring and assessment: Once the reforms are in force, the Regulators will continue to monitor the evolution of the changes. This could inform future policy decisions.
  For further information on some of the areas discussed in this article please also see:

• Securitisation reform in focus: from policy to market reality

• Securitisation reform – interpreting the Brussels mood music

• ESMA consults on private templates for Securitisation Disclosure – more haste, less speed

• Not harder, still smarter? The new UK securitisation framework nears the finish line

• Securitisation disclosure - could less be more?

• Smarter, not harder - a new securitisation framework for the UK

• Following the Basel Brick road: Significant risk transfers in 2025

• Can't put a price on risk: the impact of Basel III on significant risk transfer securitisations

• Mind the Channel: The UK finalises a path towards a stand-alone Basel 3.1 regime
  This article is current as of 31 March 2026, is for guidance only and should not be relied on as legal advice in relation to a particular transaction or situation.

References

1 On 30 April 2024, the FCA published its Policy Statement 24/4: Rules relating to securitisation and the PRA published PS7/24 – Securitisation: General requirements (together, the Rules). The Rules, taken together with The Securitisation Regulations 2024, (as will be amended by the draft The Securitisation (Amendment) Regulations 2024) (the Securitisation Regulations) and together the UK's Financial Services and Markets Act 2000 replaced assimilated law and provided the new framework for UK securitisation with effect from 1 November 2024.

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