Securities Financing Transactions Regulation
From 13 July 2020, investment firms are required to report Securities Financing Transactions (“SFTs”) to an authorised Trade Repository (“TR”) under Article 4 of the Securities Financing Transactions Regulation (“SFTR”). Due to Brexit, The EU regulations has been onshored as UK SFTR under the European Union (Withdrawal) Act 2018. In this page, SFTR refers to both EU and UK SFTR unless otherwise specified.
The scope of SFTR includes:
Both Financial Counterparties and Non-Financial Counterparties* have the reporting obligations, which cover the following:
Reporting obligations for non-financial counterparties (except NFC-) only commenced on 11 January 2021.
Only Financial Counterparties have the reporting obligations, which cover the following:
Non-financial counterparties don’t have the reporting obligations.
If the transaction was entered between a financial counterparty and a small non-financial counterparty (NFC-), the financial counterparty is required to report for both sides.
A NFC- means a non-financial counterparty which does not exceed the limits of at least 2 of the 3 following criteria:
(a) balance sheet total: EUR 20 000 000;
(b) net turnover: EUR 40 000 000;
(c) average number of employees during the financial year: 250.
Authorised Trade Repositories (TRs) under SFTR.
Reports are required to be submitted to an authorised TR by no later than one working day after the SFT has been made (T+1).
The SFTR will require the following information to be included:
For the transactions that are entered on or before the reporting start date, they must be reported if they either:
(a) have a remaining maturity exceeding 180 days after the reporting start date; or
(b) have an open maturity and actually remain outstanding for 180 days after the reporting start date. In this case, the transactions must be reported within 190 days of the reporting start date.
TRAction provides clients with delegated reporting solutions in accordance with the reporting requirements outlined above. If you are wondering how much we charge, see our pricing schedules here.
If you would like to get further information, feel free to contact us.
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