In a promising move for Australian lenders that fund themselves through securitisation markets, the UK government has announced in its ‘Big Bang 2.0’ reforms that it will be a far easier market to tap institutional investors than the European Union. 

Unlike EU laws, the UK Financial Conduct Authority will be able to make most rules itself, across debt capital markets stretching beyond securitisation. 

European issuers and investors have long complained of the slowness and rigidity of the EU's Securitisation Regulation. Ever since the financial crisis, it was widely thought that this was as much to do with retaining debt capital and the availability of credit within the EU's real economy as it was about prudential hygiene. 

Alex Sell, executive director of Sydney-headquartered exSell Capital, which has supported Australian securitisation issuers tap the huge pool of European liquidity, hailed the reforms as "still prudentially sound but now - with the recently minted Australia-UK Free Trade Agreement 'done' – this market is likely to be far more accommodating for Australia's issuers." 

Sell added, "The legal preconditions are poised to allow near frictionless, competitively-neutral access. But favourable too in practice. 

“Our economy and our securitisations have long been regarded as relatively superior in terms of underlying collateral origination and servicing as well as renowned for robust, transparent structures and performance reporting. This view is held by the investors but vitally too global regulators."