The European Commission has issued a press release stating that political agreement has been reached on the draft Regulation on reporting and transparency of securities financing transactions. The formal adoption of the draft Regulation is expected later this year.
The draft Regulation contains three measures to improve the transparency of securities financing transactions (SFTs). First, all SFTs, except those concluded with central banks, will be reported to trade repositories. Second, information on the use of SFTs by investment funds will be disclosed to investors in the regular reports and pre-investment documents of funds. Finally, minimum transparency conditions will need to be met on reuse of collateral, such as disclosure of the risks and the need to grant prior consent.