On 31 March, in accordance with their mandate for periodic review under Article 44 of the Securitisation Regulation, the European Banking Authority, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority published a report on the effectiveness of the European Securitisation Regulation (the “Report”).

The Report contains many recommendations for reform and also includes interpretive guidance as to the application of the Risk Retention Regulatory Technical Standards (the “RTS”) relating to the “sole purpose” test that entities holding the required risk retention as originators must satisfy under the Securitisation Regulation (the “Guidance”). In particular, the Guidance focusses on the “predominant revenue” test set out in the RTS (the “PR Test”) as such test applies to third party origination vehicles – risk retention structures that are widely used in CLOs.

We would like to hear from you with your views on the Report so please do get in contact with hannah.vanstone@lma.eu.com if you have any views you’d be happy to share. 

Read more about the Report

The LMA welcomes ESMA’s general approach to template reform as set out in the Consultation Paper and supports the implementation of a simplified template for reporting of private securitisations in the short-term, ahead of the outcome of the Commission’s broader Securitisation Regulation review.  In particular, we believe that a simplified template should be made rapidly available for CLO reporting in order to provide relief for CLOs from the unduly onerous reporting burden under the current regime.

However (as set out in more detail in our response), ESMA’s proposal that the simplified template should only be made available for transactions where each sell-side entity is established in the EU is likely to limit applicability to European CLOs as very few will meet this requirement. Unless the issues mentioned in our response can be adequately addressed by ESMA, our preference would be to retain the current template reporting regime pending the outcome of the Commission’s broader Securitisation Regulation review

To read our consultation response in full, please click here.

Friday, 21st March marks Charlotte Conlan’s official final day at BNP Paribas. Charlotte will also be stepping down as Chair of the Loan Market Association. We would like to congratulate her on this next chapter of her life and extend our deepest thanks for the tremendous work she has done for the LMA.

We are pleased to welcome Martin H. Luehrs, Head of Global Capital Markets at Morgan Stanley, as the new Chair. He will be supported by Paul Gibbon (SMBC), Doug Laurie (Barclays), and Michael Craig (Invesco) as Vice-Chairs. 

Today, The Loan Market Association, in collaboration with Asia Pacific Loan Market Association (APLMA) and the Loan Syndications and Trading Association (LSTA), published the updated Green, Social and Sustainability-Linked Loan Principles (‘Principles’) and corresponding Guidance documents (‘Guidance’). The Principles set out the core components for these labelled instruments, whilst the corresponding Guidance provides the definitive framework for structuring Green, Social, and Sustainability-Linked Loans.

Developed by an experienced working party of financial institutions, law firms and external review providers at the forefront of sustainable finance, the Principles and Guidance are designed to reflect market best practice, and provide a foundational tool to protect the integrity of the labelled loan market.

The past five years have experienced considerable growth in the labelled loan space and, as such, market practice is in a constant state of evolution. Accordingly, the Principles and Guidance will continue to develop in line with these changes, with the March 2025 updates reflecting the latest market developments.

Today, we want to give a special shoutout to our dedicated members – along with participants from across the wider banking and private credit markets – for their invaluable contributions to the LMA’s first-ever Sustainable Finance Insights Report on Greenwashing: Understanding and Navigating the Impacts for the Loan Market. A special thank you to Hannah Vanstone (LMA) and Sukhvir Basran (King & Spalding) for their tireless efforts in bringing this report to life. 

Key insights from the report:

• How banks and private credit fund managers are responding to new UK and EU regulations.
• The impact of greenwashing on demand for GSS loans.
• Measures being taken to address greenwashing risks.
• Key challenges and opportunities for mitigating these risks.

Explore more

Today, we responded to ESMA’s consultation on the draft Regulatory Technical Standards on open-ended loan originating alternative investment funds.

The LMA welcomes ESMA’s approach in providing a harmonised implementing framework tailored to the specificities of OE LO AIFs, allowing managers to demonstrate to their respective NCAs that they can maintain an open-ended structure.

We believe that the framework should be aligned with market trends aimed at meeting investors’ increasing demands for alternative investment strategies with a liquid profile.

Read the full response here

The EU faces a complex global economic landscape with rising competition, rapid technological advancements, and the need for strategic investments. Strong banking, capital markets, and diverse financing channels are crucial to supporting European businesses—especially SMEs, scale-ups, and infrastructure projects—ensuring they can grow and compete globally

Please read the full response to see our recommendations to the Commission. 

Thank you to all our buy-side and sell-side members who contributed their insights to the response. Your feedback has been instrumental in shaping the LMA’s response and ensuring that the collective voice of the market is heard.

Our key points focus on the need to take account of the diversity of:

(i) NBFIs themselves;

(ii) the activities they undertake; and

(iii) the ways in which they use leverage.

Click below to see the response. 

The LMA is pleased to have published the second in its series of Fund Finance Insights papers. These are intended to enhance understanding of this growing asset class.

This second Fund Finance Insights paper builds on the previously published Insights exploring the ​history and evolution of fund finance in Europe​. The latest Insights paper turns to the evolving fund finance market in Middle East and Africa.

There has been much talk about the growing role of NAV financing in fund finance. Whilst this is not a new product, it has been receiving increasing attention. In this LMA Talks Loan Markets we sat with market senior leader to unpack the future of NAV financing.

Listen on Spotify.

The LMA is pleased to have published a Fund Finance Glossary. This is intended to help drive efficiency in, and understanding of, the market.

The fund finance market is increasingly in focus and is ever evolving. Different terms are often used to describe the same thing (think sublines and capital calls) and there can also be instances of parties speaking at cross-purposes (think recyclable and recallable capital). This can create inefficiencies in practice.

Article 118-bis requires loan agreements to include clauses dealing with benchmark changes. This can also impact English law loan agreements. We continue to work proactively with our members on this, including through the EURIBOR Fallbacks Task Force, to assist efficiency in the market. 

The LMA has today published its high-level position paper on the EU’s First Omnibus package on sustainability.

To read the full response, please click here.  If you’d like to find out more, please contact hannah.vanstone@lma.eu.com.

Yesterday, the LMA submitted its response to HM Treasury’s consultation on the value case for a UK Green Taxonomy.

A copy of the consultation response can be found here.

The Loan Market Association (LMA) is delighted to announce the release of the first in our Fund Finance Insights series, an initiative aimed at enhancing understanding and engagement with this vital asset class.

Our inaugural paper, Tracing the History and Evolution of Fund Finance in Europe, uncovers the long-standing tradition of innovation and resilience within fund finance, challenging the perception that it is a relatively recent phenomenon. 

Our quarterly publication offering thought-provoking commentary and expert perspectives on sustainable finance.

Download PDF versions of past issues you may have missed.