On 7 September 2020, the Financial Stability Board (FSB) issued a press release stating that it has decided to delay by one year the implementation dates for its policy recommendations relating to minimum haircut standards for non-centrally cleared securities financing transactions.
In August 2013 the FSB developed policy recommendations to address financial stability risks that arise from securities financing transactions (SFTs). These recommendations were subsequently updated in the FSB’s November 2015 report, Regulatory framework for haircuts on non-centrally cleared securities financing transactions.
In March 2020 the Group of Central Bank Governors and Heads of Supervision decided to defer the implementation of the Basel III framework by one year to January 2023. Since the FSB framework for numerical haircut floors for bank-to-non-bank transactions is expected to be implemented through the Basel III framework in many jurisdictions, the FSB has decided to also extend the implementation dates by one year for its policy recommendations related to minimum haircut standards for non-centrally cleared SFTs.
For bank-to-non-bank transactions, the updated implementation date is January 2023 (instead of January 2022). For non-bank-to-non-bank transactions, the updated implementation date is January 2025 (instead of January 2024). This is in line with the re-prioritisation of the FSB’s work in light of the COVID-19 pandemic and will give market participants (both banks and non-banks) more time to prepare for the implementation of the framework of numerical haircut floors set out in minimum haircut standards.