As long as there is outstanding exposure, counterparties are required to report the relevant components of a margin loan. With that being said, the current technical standards do not allow for the reporting of cash collateral for margin loans. As a result, counterparties cannot report zero collateral for margin lending. In this case, counterparties should use the ISIN EU000A1G0EB6 (European Financial Stability Facility) as an agreed default value in field 2.78 (Identification of a security used as collateral) to report zero collateral for margin loans.
The above reporting method is in accordance with Article 5(2) of CIR (EU) 2019/363 and section 5.4.4 of the ESMA SFTR Reporting Guidelines. Please do not hesitate to contact us if you would like to discuss collateral reporting under SFTR.
