13th Aug 2019
The Securities Financing Transaction Regulation (EU) 2015/2365 (“SFTR”) came into effect on 12 January 2016. Its aim is to increase the transparency of Securities Financing Transactions (“SFTs”) and the reuse of collateral, by requiring counterparties to report details of concluded SFTs, modifications and terminations to a central trade repository registered with ESMA. Following the introduction of the European Market Infrastructure Regulation (EMIR) and the Markets in Financial Instruments Regulation (MiFIR), it is anticipated that the SFTR will complete the transaction reporting ecosystem.
Reporting requirements under Article 4 of the Regulation were scheduled to come into effect not earlier than 12 months after the date of entry into force of delegated acts adopted by the European Commission. These delegated acts, consisting mostly of regulatory technical standards (“RTSs”) came into force on 11 April 2019. Credit institutions and investment firms will be required to comply with the reporting requirements within 12 months of April 2019, Central Counterparties and Central Securities Depositaries within 15 months, and all other financial institutions, including insurance undertakings, pension funds UCITS and AIFs within 18 months. Non-financial counterparties will have 21 months to comply from April 2019.
ESMA published a consultation on the reporting guidelines under Article 4 (and Article 12 relating to the transparency and availability of data held by trade repositories) on 27 May 2019. ESMA held an open hearing on the consultation paper on 15 July 2019 and will consider all comments on the consultation paper received before 29 July 2019. ESMA expects to publish a final report on the Guidelines on Reporting SFTR in Q4 2019 to supplement the RTSs adopted by the Commission.
For more information about the SFTR please click here.