Securities Financing Transaction Regulation
What are SFTR Regulations?
Europe’s Securities Financing Transaction Regulation (SFTR) mitigates risk in securities financing transactions (SFTs), which are securities or assets used to secure funding.
Governed by the European Securities and Markets Authority (ESMA), SFTR implements the Financial Stability Board’s (FSB) policy framework and addresses shadow banking risks in securities lending, while increasing transparency in European markets.
The European commission identifies an SFT as:
- A repurchase transaction
- Lending a security for a fee in return for a guarantee
- A buy-sell-back transaction or sell-buy-back transaction
- A margin-lending transaction
Concerns relating to the quality and fair use of collateral in SFTs ultimately led to the introduction of SFTR and a requirement for additional transparency.
Introducing the phased timeline for reporting obligations mandated by SFTR:
July 13, 2020Credit institutions, investment firms, central counterparties (CCPs), central securities depositories (CSDs) and relevant third-country entities.
October 12, 2020Insurance companies, funds, institutions for occupational retirement provision (IORPs) and relevant third-country entities.
January 11, 2021Non-financial counterparties.
Why partner with Refinitiv for SFTR
At Refinitiv, we help customers navigate the 150+ attributes defined in SFTR to submit daily modifications, terminations and corrections in their transaction. We also support reporting firms’ required disclosures of collateral market values, collateral reuse and margin information.
Our global, cross-asset reference data capability can meet a significant proportion of firms’ reporting requirements. Our enhanced service includes additional fields so firms can comply with SFTR, including a regulatory-specific taxonomy ‘SFTR security type’ and security quality details.
We include referential content relevant to SFTR in our existing reference data packages – available as a bulk delivery, by asset type and region. You can access this service via DataScope Plus or a portfolio-based request and response service using DataScope Select.
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