Meet your reporting requirements for Securities Financing Transactions
The Securities Financing Transactions Regulation (SFTR), which came into force on 12 January 2016, intends to increase transparency in securities financing markets by introducing reporting requirements for securities financing transactions (SFTs) - similar to those already applicable to derivatives transactions under the European Market Infrastructure Regulation (EMIR). The SFTR is part of a global initiative introduced by the Financial Stability Board (FSB) to reduce financial stability risks from shadow banking activities.
Transaction reporting and recordkeeping
The transaction reporting and recordkeeping requirements are set in article 4 of the SFTR.
The regulation requires affected counterparties to report counterparty, transaction, collateral composition, margin and reuse details of:
- Repurchase transactions (repos);
- Sell-buy back or buy-sell back transactions;
- Securities or commodities borrowing/lending transactions; and
- Margin lending agreements.
The conclusion, modification or termination of an SFT must be reported to a trade repository (TR) that is registered or recognised in accordance with the SFTR.
Scope and implementation timeline
Whereas EMIR focuses on OTC and listed derivatives’ reporting, SFTR extends its reach to the new arena of securities financing trades such as repo and securities lending. The proposed regulation covers SFTs conducted by all EU financial institutions as well as non-financial counterparties and requires companies to report their SFTs to an approved EU trade repository.
The actual start date for transaction reporting depends on the respective regulatory technical standards (RTS) of the reporting requirements. The reporting start dates for firms will be introduced in phases, as below:
- 11 April 2020: Investment and credit institutions
- 11 July 2020: CCPs and CSDs
- 11 October 2020: Insurance/reinsurance undertakings, UCITS ManCos, AIFMs and IORPs
- 11 January 2021: Non-financial entities
Supporting our clients in complying with SFTR
Clearstream plays a dual role in the context of SFTR. Firstly, acting as a triparty agent supporting its customers in meeting their final reporting obligations, and secondly acting as a counterpart in various service offerings and subject to its own reporting obligations, for example, Securities Lending (for both fails lending (fails curing) and strategic borrowing purposes) with Clearstream acting in a principal role.
Triparty Agent
Clearstream, acting as triparty agent, aims to support customers in relation to their collateral data and re-use information for all SFT activities collateralised within triparty collateral management applications.
Our objective is to provide choice to customers to leverage their existing connectivity and reporting facilities coupled with new enhanced SFT supporting reports, so as to enable them to complete their “Counterparty”, “Loan and collateral” and “Re-use” reporting obligations themselves.
Customers subscribed to the triparty services of Clearstream Banking Luxembourg SA (CBL) can leverage the two new reports to meet their regulatory requirements:
- Collateral Allocation Report: Information on confirmed collateral position;
- Collateral Reuse Report: Raw data elements on collateral which has been re-used within triparty environment.
Information about these reports can be found in the CmaX Connectivity Guide.
Clearstream Banking AG (CBF) customers can leverage the existing MT569 reports provided by Xemac.
Securities Lending
Clearstream, where it acts as principal to the SFTs, will be undertaking its own full reporting obligations. In addition, we aim to support borrowers and lenders in relation to their reporting needs.
Our objective is to provide choice to customers to either delegate their reporting to us (which is allowed for under the RTS) or to leverage their existing connectivity and reporting facilities coupled with new enhanced SFT supporting reports, if they wish to decline the delegation option and do the full “Counterparty”, “Loan and collateral” and “Re-use” reporting themselves.
Customers subscribed to the triparty services of Clearstream Banking Luxembourg SA (CBL) can leverage the two new reports to meet their regulatory requirements:
- Collateral Allocation Report: Information on confirmed collateral position
- Collateral Reuse Report: Raw data elements on collateral which has been re-used within triparty environment
These reports are accessible via CmaX Connectivity Guide.
Clearstream Banking AG (CBF) customers can leverage the existing MT569 reports provided by Xemac.
For both Triparty Agent and Securities Lending queries, please contact Clearstream SFTR Solutions via SFTR@clearstream.com.
Rely on our DBG offering to manage your reporting requirements for SFTs
Deutsche Börse Group’s (DBGs) service offering already leverages multiple external and internal data sources to enrich reporting records for SFTs:
Securities Lending and Triparty Collateral Management Services (Clearstream)
Bilateral and cleared markets (Eurex Repo)
- Cleared Repo including GC Pooling, Lending CCP (Eurex Clearing)
- Registered SFTR "TR" will be providing services to market participants to meet their regulatory reporting obligation (Regis-TR)
Rely on DBGs regulatory experience as trading venue, regulated market, CCP, (I)CSD and trade repository (REGIS-TR) in managing and supporting regulatory change.