AXA Investment Managers (AXA IM)is a multi-expert asset management company within the AXA Group, a global leader in financial protection. AXA IM is one of the largest European-based asset managers with €527 billion in assets under management. AXA IM employs over 3,000 people around the world and operates out of 21 countries. We set out below our comments on the Second public consultation paper on possible changes to the CRD, relatng to securitsiation.

AXA IM considers these proposals to be ill-conceived and poorly thought through, and hopes that the Commission will completely reconsider its approach to this topic, for the reasons set out below.

We believe that aligning the interests of originators with those of investors should make securitisations more attractive to investors. However, this is only one of the factors forming an investment decision and should operate only as a market factor, rather than being enforced by regulation. And enforcing it as a norm for certain types of EU investor does not necessarily mean it is a "better" investment thanone where the originator is not sharing the risks.

The shift of approach from focusing on structurers to focusing on investors is likely to have a number of perverse consequences relative to the original objectives, which could be even more damaging than the original concerns about putting EU originated securitisations at a globalcompetitive disadvantage.

Since originators are unlikely at the outset to know the domicile and profile of all their investors, they may be forced to retain risks relating to particular tranches of their securitisation that are not representative of the risk profile of the issue as a whole (for example holding excessively large proportions of higher risk tranches if this matches the holdings of their EU bank / insurance / UCITS investors).

The need for very broad product coverage to exclude avoidance and structuring arbitrage may still lead to avoidance through the creation of unnecessarily complex and opaque instruments, and a risk that instruments are caught that should not be - how exactly does one distinguish between a securitsation SPV and a closed endedinvestment company with multiple shares classes?

Finally, we are concerned that the proposals would place unwarranted restrictions on the freedom of investment managers to achieve an unrelated objectiveconcerning the regulatory capital of structurers, and that the overall approach is excessively convoluted and complex.

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AXA Investment Managers

ROBIN CLARK

GLOBAL HEAD OF REGULATORY AFFAIRS