On 5 March 2021, the FCA updated its webpage concerning UK SFTR news.
Specifically, the webpage covers the approach to reporting references to LIBOR in securities financing transactions under the UK Securities Financing Transactions Regulation (UK SFTR).
The webpage provides that:
- For UK SFTR reporting, it is essential that the UK SFTR transaction data accurately reflects the details of the transaction.
- Under Article 4 UK SFTR, counterparties to SFTs must report any modification of an SFT they have concluded to a registered or recognized trade repository no later than the working day following the modification of the transaction.
- In terms of an SFT say that, either immediately or at some other point in time, an alternative rate applies in the place of LIBOR, this would bring about a modification that is reportable under the UK SFTR. The FCA would expect this modification to be reported at the time that the alterative rate takes effect. This applies to all agreed terms that result in an alternative rate applying in place of LIBOR.
- Whilst the FCA expects firms to make the necessary preparations to ensure the relevant UK SFTR reports are updated in a timely manner, the FCA will apply its supervisory powers for this requirement in a proportionate and risk-based manner.