CP2/26 – Reforms to securitisation requirements

What Changed

• The proposals amend PRA rules and supervisory guidance in the Securitisation Part of the PRA Rulebook, including:
• Due diligence: Remove prescriptive verification of credit-granting criteria (Chapter 2 Article 9), risk retention (Chapter 2 Article 6 and Chapter 4), STS criteria, specific information availability, ongoing monitoring lists, stress testing, internal
• Risk retention: Introduce a new combined modality merging two existing ones.
• Market disclosure (transparency): Streamline for all securitisations; amend underlying documentation, delete PRA templates (use revised FCA Handbook templates), disapply templates for investor reports/inside information/significant events, disapply f
• Regulatory reporting: Disapply COREP C14.00/C14.01 for single-loan retail securitisations; introduce consistent non-performing exposure (NPE) definition.
• Resecuritisations: Exempt two structures from existing ban; introduce alternative capital treatment for CRR firms' exposures.

Suggested Considerations

• Review and respond: Analyse proposals against current operations; submit feedback by 18 May 2026 to CP2_26@bankofengland.co.uk, indicating confidentiality and publication consent.
• Gap analysis: Assess due diligence processes, risk retention setups, disclosure templates, reporting (e.g., COREP), and capital models for resecuritisations/MGS loans; update for proportionality.
• Coordinate with FCA: Align on shared templates/transparency (per FCA CP26/6); prepare for repository shift.
• Policy updates: Revise internal policies, training, and systems for new risk retention modality, reduced verifications, and readability improvements post-final PS.
• Monitor legislation: Track HM Treasury SI and PRA policy statement for final rules.

Key Dates

Who is Affected