Structured finance and securitisation
Luxembourg’s securitisation market is built on one of the most comprehensive standalone securitisation frameworks in the EU: a dedicated law setting out how a securitisation undertaking is formed, funded and run, rather than the activity being improvised on top of ordinary company law.
The regime is widely used: 1,711 securitisation vehicles were active in Luxembourg as of March 2026, with approximately 8,000 active securitisation compartments and transactions.
A dedicated regime
The Securitisation Law of 22 March 2004 defines the powers and operation of the vehicle and the position of claims within it. For originators, arrangers and investors, the statutory framework means that core questions around the transfer and segregation of risk do not have to be resolved through bespoke contractual structuring for each transaction.
Compartments and statutory ring-fencing
A securitisation undertaking can create compartments with separate assets, liabilities and investors. As each is separated by statute, claims against one compartment cannot reach another, so several unrelated risk pools can share one undertaking without a separate company for each transaction. An arranger running several transactions, a receivables programme, a loan portfolio, a private credit book, establishes and maintains one undertaking rather than a separate company for each, with the ring-fencing being statutory rather than assembled only through contract.
"Luxembourg has dramatically enhanced its tools and its securitisation law in particular. It provides one of the most flexible and sophisticated legal frameworks available to structure securitisation platforms for banks, private credit managers and corporates, across a large variety of assets. It is internationally recognised as an efficient and scalable structure for them.”
Louis-Maël Cogis, Co-Chair of the Securitisation Working Group at the Luxembourg Capital Markets Association and Partner, Simmons & Simmons
What the 2022 reform opened up
The Law of 25 February 2022 materially widened the uses of Luxembourg securitisation vehicles.
- Vehicles can finance themselves through any financial instrument and through any form of loan, removing the previous requirement to raise funds by issuing securities, thereby making bank-funded and privately placed structures far simpler to run.
- The law introduced a statutory framework for active management of a securitised portfolio covering debt securities, debt financial instruments, or receivables, provided the instruments are privately placed rather than offered to the public. This allows actively managed CLOs to be established and run in Luxembourg, where the manager trades the underlying loans during the life of the vehicle.
- The available range of legal forms were extended to include partnerships and the simplified joint-stock company, giving arrangers more choice over governance and transaction structure.
A further reform, the Bill of Law No. 8761, was tabled in June 2026 and is under discussion.
If adopted, it would extend active management beyond debt-only portfolios, broaden vehicle financing methods and permit investment from one compartment into another, among other changes.
With this reform, operators benefit from enhanced flexibility and increased legal certainty in the implementation of securitisation transactions governed by Luxembourg law.
Issuance, listing and servicing in one place
Luxembourg also provides the operational chain around the vehicle. Corporate service providers and agents administer the undertaking, instruments can be listed on LuxSE where required, and Clearstream can handle settlement and servicing. That keeps the legal vehicle, issuance process and post-trade infrastructure in one jurisdiction.
Luxembourg’s blockchain laws also provide a legal basis for DLT-based issuance and settlement, allowing structured securities to be issued and recorded on distributed ledgers rather than solely through conventional issuance infrastructure.
