Industry associations publish SFTR breakdown letter
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Industry associations publish SFTR breakdown letter 13 April 2016 London Reporter: Drew Nicol
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Five industry bodies have joined forces to publish a joint statement to help market participants comply with Securities Financing Transactions Regulation (SFTR) requirements.
The EU’s SFTR rules come into force from 13 July 2016 and affect all existing and future title transfer and collateral arrangements.
The SFTR Information Statement is the collaborative effort of the International Securities Lending Association, the Association for Financial Markets in Europe, the International Capital Market Association, FIA, and the International Swaps and Derivatives Association to highlight risks involved in security collateral arrangements and concluding title transfer collateral arrangements.
Under the SFTR, all parties accepting collateral must inform their counterparties of the risks involved in entering a title transfer arrangement or granting a right to reuse collateral under a security arrangement.
Failure to effectively comply with the new disclosure requirements will incur a fine and repeat offenders could face more severe repercussions depending on the member state within which the entity is based.
Securities Lending Times is running a regulatory workshop regulatory workshop in London on 18 May that will cover SFTR along with other securities finance transaction regulations.
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