European Commission adopts SFTR rules

Monitoring of financial stability risks outside the banking sector: Commission adopts package of rules to increase transparency in securities financing markets

In an important step towards increasing the transparency of securities financing markets, the Commission adopted today a package new measures under the Securities Financing Transactions Regulation (SFTR). The SFTR requires all securities financing transactions to be reported to a central database called “trade repository”. The delegated and implementing acts adopted today will specify the details for the authorisation of trade repositories as well as the rules they will be subject to, including reporting requirements. This compulsory reporting will lead to an improved surveillance of significant market developments, such as the build-up of leverage in the financial system. Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union, said: “The package adopted today is a crucial element to ensure that, as risks move outside our highly regulated banking sector, they do not disappear from the radar screen of supervisors. It will make market-based financing activities more transparent and allow public authorities to better observe market developments. Supervisors will be able to act timely in order to mitigate potential risks related to securities financing transactions”. The delegated and implementing acts are now submitted to the European Parliament and Council for scrutiny. At the end of the scrutiny period, the acts will jointly be published in the Official Journal. More information here.

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