As required under the Regulation on reporting and transparency of securities financing transactions (SFTR), the Commission has published a report on progress of its efforts to mitigate the risks associated with SFTs.
The report covers the Financial Stability Board’s (FSB) recommendations aimed at mitigating SFT risk and provides a brief assessment of European SFT markets. The conclusion is that the FSB recommendations on SFTs have been largely addressed in the EU through the adoption of SFTR and specific provisions in financial services legislation and guidelines. Therefore, there is no need for further regulatory action at this stage. Nevertheless, the Commission will continue to monitor developments in SFT markets and the international regulatory space. It will also reassess the value of qualitative standards and haircut floors on the basis of a report to be prepared by ESMA once comprehensive SFT data is available.