Trade groups team up for SFTR paper

Trade groups team up for SFTR paper

  • Export:

Five financial trade bodies have published a breakdown of the risks and consequences of one aspect of the EU’s Securities Financing Transactions Regulation (SFTR).

ISLA, the main securities lending association and capital markets group ICMA are behind the document, drawn up to inform market participants of the new rules.

Specifically the points relate to Article 15 of SFTR, which seeks to impose rights on the ability of counterparties to engage in the reuse of a counterparty's assets.

AFME, FIA and derivatives body ISDA also contributed to the paper which participants can tailor to suit their own specific circumstances.

Once in force, SFTR requires all securities loans, repos, reverse stock loans, buy and sell back and similar operations to be declared to an EU trade repository.

Fund managers must also inform investors of their use of these types of deals.

In addition, rules coming into force from July this year will affect all existing and future title transfer and security collateral arrangements under a variety of financial agreements.

Under the SFTR, all parties that accept collateral are obliged to inform their counterparties of the risks involved in entering a title transfer arrangement or granting a right to reuse collateral under a security arrangement.

  • Export:

Related Articles