On December 23, 2015, the EU Regulation on the Reporting and Transparency of Securities Financing Transactions and of Reuse, known as the SFTR, was published in the Official Journal of the European Union. The aim of the SFTR is to improve the transparency of securities lending, repurchase transactions, reverse repurchase transactions, buy-sell back or sell-buy back transactions and margin lending transactions which will help reduce the likelihood of banks seeking to avoid rules applicable to them by moving certain of their activities to the shadow banking sector. The SFTR requires: (i) all securities financing transactions, subject to certain exceptions for central banks and similar bodies, to be reported to EU recognized trade repositories; (ii) investment funds to disclose their use of SFTs to investors in regular reports and pre-investment documents; and (iii) minimum conditions to be met on the reuse of collateral, such as disclosure of risks and the need to obtain prior consent. The SFTR also makes certain amendments to the European Market Infrastructure Regulation, including inserting provisions through which equivalence decisions for third country trading venues for the purpose of OTC derivatives can be made and adding a number of authorities to the list of authorities to which trade repositories must provide trade reporting information. The SFTR will apply directly across the EU from January 12, 2016 subject to certain exceptions which will apply at a later date, including the reporting obligation (which is being phased in according to counterparty type), the transparency obligations on management companies and Alternative Investment Fund Managers, and the restrictions on rehypothecation.

The Regulation is available at: http://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=OJ:JOL_2015_337_R_0001&from=EN.