Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Securitisation definition

What does Securitisation mean? Securitisation is a financing technique that converts non‑tradable, income‑producing assets into tradable securities by pooling exposures and issuing notes backed by their cash flows. In practice, an originator sells receivables (for example, mortgages, consumer loans or trade receivables) to a bankruptcy‑remote special purpose vehicle (SPV/SSPE), which issues asset‑backed securities, usually in tranches (senior, mezzanine and junior). Alternatively, in a synthetic securitisation the credit risk is transferred by credit protection while assets remain on the originator’s balance sheet. Key legal features include: achieving a true sale or effective risk transfer; perfection/notification of assignments (assignation in Scotland); security and trust arrangements; servicing...

A practitioner’s guide to UK and EU securitisation: structures, parties, tranching, credit enhancement; STS, risk retention, transparency and capital; credit ratings; NSI Act and US Rule 192

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Practice notes

STOP PRESS:

On 17 June 2025, the European Commission unveiled its long‑anticipated review of the EU Securitisation Framework, alongside a wide‑ranging legislative proposal to amend the EU Securitisation Regulation (Regulation (EU) 2017/2402), the EU Capital Requirements Regulation (Regulation (EU) No 575/2013), the EU Solvency II Delegated Regulation (Commission Delegated Regulation (EU) 2015/35) and the EU Liquidity Coverage Requirement Delegated Regulation (Commission Delegated Regulation (EU) 2015/61). Changes to the EU Securitisation Regulation span, among other points, risk retention, disclosure, STS on‑balance sheet securitisations and the definitions of public and private securitisation. Revisions to the Capital Requirements Regulation concern, among other matters, risk‑sensitive capital requirements, resilient securitisation positions and significant risk transfer tests. Further consultations and amendments are expected as the EU legislative process advances.

Securitisation is a financing technique

Securitisation enables investment in Asset classes that are otherwise difficult to access — namely ‘illiquid’ assets such as bilateral loans and mortgages and other lending to natural persons. In its most familiar and basic structure, securitisation is a financing method whereby large pools of these cash‑generating assets are transferred to a special purpose vehicle (SPV). The SPV pays...

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Web page updated on 21/05/2026

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