[author: Kevin Wong]

The General Affairs Council formally adopted at first reading the European Commission proposal for a Regulation of the European Parliament (“EP“) and of the Council amending Regulation (EU) 575/2013 on prudential requirements for credit institutions and investment firms (CRR Amendment Regulation) and a proposal by the Commission for a Regulation of the EP and of the Council laying down common rules on securitization and creating a European framework for simple, transparent and standardized securitization (Securitization Regulation) on November 20, 2017.

Both Regulations were adopted as an A item, meaning that they could be formally adopted without requiring a debate. This was expected, taking into consideration the undertaking given by the Council representative by letter of June 28, 2017 to approve the EP’s first reading position on both draft Regulations without further amendments. The EP formally adopted the two Regulations on October 26, 2017.

The new rules laid down in these two Regulations are part of the EU’s plan to develop a fully functioning Capital Markets Union by the end of 2019. The EU believes developing a securitization market will help create new investment possibilities and provide an additional source of finance, particularly for SMEs and start-ups.

The Commission adopted its proposals for these two Regulations on September 30, 2015.