June 25, 2025
By: Robert Van Egghen
Proposed reforms to the EU’s securitisation rules risk “stalling” investment in collateralised loan obligations by asset managers after a recent surge in product launches, according to experts.
The European Commission recently published plans to overhaul the EU’s securitisation framework in a bid to encourage lending and boost investment in the bloc.
The rules, which were put in place following the 2008 financial crisis, have been blamed by the financial sector for hindering capital markets activity in the EU due to burdensome reporting and due diligence requirements.
Although Brussels has proposed to simplify due diligence procedures for issuers based in the EU, European asset managers investing in non-EU securities would still be required to comply with the current requirements…
Michael Pedroni, chief executive of Highland Global Advisers, a regulatory consultancy, said the commission’s plans “do not recognise that markets for CLOs and other securitised assets are global, with differing risk retention rules across jurisdictions”.
He said: “The aim of the commission’s changes is to jumpstart European markets for asset backed securities but some of [what] they have proposed will result in another stalled engine for investment.
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