Asset Management & Investment Funds Q&A: April 2019

Question

The dates for reporting by counterparties of securities financing transactions (SFTs) to trade repositories are now known. What does this mean for UCITS and AIFs?

Answer

Under Regulation (EU) 2015/2365 on transparency of securities financing transactions and of reuse or SFTR, UCITS Management companies and AIFMs are responsible for reporting the SFTs entered into by their respective UCITS and AIFs. UCITS and AIFs using SFTs have already disclosed details in their prospectus and financial statements. Details of all STFs entered into must be reported to a trade repository (TR) on or after 11 October 2020. If a TR is not available, details are to be reported to ESMA. Reporting can be delegated.

Timelines for reporting the SFT are summarised in the table below:

Reports must include:

• the parties to the SFT and, where different, the beneficiary of the rights and obligations arising therefrom
• the principal amount
• currency
• assets used as collateral and their type, quality and value
• the method used to provide collateral
• whether collateral is available for reuse
• where collateral is distinguishable from other assets, whether it has been reused
• any substitution of collateral
• the repurchase rate, lending fee or margin lending rate
• haircuts
• the value date
• the maturity date
• the first callable dat
• the market segment

The SFTR entered into effect on 12 January 2016.  There was a phase-in schedule for some of the main obligations, including the reporting obligation. A reminder of the requirements of SFTR applicable to UCITS and AIFS is summarised here.

For more information in relation to this topic please contact a member of the Asset Management & Investment Funds team.

Date published: 30 April 2019