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SFTR

Securities Financing Transactions Regulation (SFTR)

The proposal for a Securities Financing Transactions Regulation (SFTR) provides a set of measures aiming to enhance regulators’ and investors’ understanding of securities financing transactions (SFTs). During the financial crisis, regulators and supervisors encountered difficulties in anticipating the emergence of risks in the area of securities financing. Both internationally and in the European Union, it was widely agreed that transparency needs to be enhanced.

Objective

SFTR is part of a globally coordinated effort initiated by the Financial Stability Board (FSB) to reduce financial stability risks from shadow banking activities.

The regulation will require companies to report their SFTs to an approved EU trade repository.

Time line

On 29 January 2014, the European Commission adopted a proposal for a regulation aimed at increasing transparency of SFTs and of reuse. A reporting obligation is expected for 2018. The European Securities and Markets Authority (ESMA) is currently working together with the national competent authorities (NCAs) and the European System of Central Banks (ESCB) on draft regulatory technical standards, which have to be submitted to the Commission by 13 January 2017.

SFTR: the highlighted parts of the value chain are affected

ESMA consultation on SFTR

Knowledge

ESMA has published a consultation paper on draft technical advice on ESMA’s fees for Trade Repositories (TRs) under the Securities Financing Transactions Regulation (SFTR). The deadline for comments is 31 January 2017.

ESMA consultation on draft RTS and ITS under SFTR

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ESMA invited responses to the specific questions listed in the draft regulatory technical standards (RTS) and the implementing technical standards (ITS) under SFTR and to amendments to related EMIR RTS, published on the ESMA website. Responses have been submitted and published.

Market Data+Services: SFTR client briefing

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Get ready now for upcoming reporting requirements under SFTR.

Legal basis

Find the most recent legal text on this regulation here.