This consultation, which was eagerly awaited, is a welcome opportunity to understand the current obstacles to the revival of securitisation. As of now, securitisation remains an under-utilized tool in Europe for financing the economy, therefore represents a powerful lever for the Capital Markets Union. European securitisation, which represented 2,000 billion in 2008, has been reduced to 1,200 billion in 2023, while in the US, current outstandings (13,700 billion in 2021) have exceeded the 11,300 billion from 2008.

In our response, AFG members recommend the following measures to revitalize the securitisation market in Europe:

1. A review of prudential costs
   For AFG members, this is the most essential measure for revitalizing securitisation in Europe. Today, the prohibitive prudential cost of investing in securitisation drastically reduces demand from investors for whom such investments are not financially attractive.
2. Promoting alignment between STS and corporate financing
   AFG members maintain that a far-reaching reform of securitisation is needed, one that is not focused on STS securitisation. Since its introduction in 2019, STS securitisation has failed to deliver the hoped-for boost. The STS label, in its current form, is not fully suited to encouraging securitisations geared towards corporate financing. It would therefore be appropriate to clarify and broaden the definitions applicable to homogeneous pools of assets to better reflect the specificities of SME exposures.
3. Simplification and differentiation of transparency requirements
   While a simplification of transparency requirements is necessary, the idea of lightening these reporting requirements should be handled with caution, as transparency is an important differentiating feature of securitization, compared with other asset classes. It would be useful to adapt reporting requirements according to the nature of the transactions, without compromising the quality of the information made available to investors.
4. Harmonizing supervision
   Differences in supervisory practices between member states lead to inefficiency and additional costs for stakeholders. A collaborative approach between regulators would reduce uncertainty and create a level playing field for all market players.
5. Obtaining the regulated status of Third Party Verifiers (TPV)
   The need to obtain regulated status for TPVs would be a plus in lightening the load of investor due diligence on STS criteria, which are subject to multiple controls by investors, TPVs, originators and supervisors.