Revocation of retained EU law Transitional amendments Amendments to the EU Securitisation Regulation 2017
Securitisation is the process of pooling various financial exposures (such as mortgages, car loans, or other consumer loans) to create a financial instrument that can be marketed to investors. These financial instruments are ‘tranched’, to reflect the fact that they carry different levels of risk and return to suit the appetite of different investors. This process allows lenders (such as banks) to transfer the risks of loans or other assets to other banks or investors (such as insurance firms or asset managers). This process can help free up lenders’ balance sheets to allow for further lending to the economy.
	The key entities typically involved in securitisations are an originator and/or sponsor, a securitisation special purpose entity (‘SSPE’), and investors. The originator is responsible for creating or acquiring the exposures (for example, loans or receivables) to be securitised. The sponsor typically establishes and manages a securitisation programme by purchasing exposures from another entity (for example, an original lender) and transferring them to the SSPE. 4 The SSPE purchases the exposures, packages them up, and issues securities in the market for investors to invest in. These securities are backed by payments generated by the underlying exposures.