FMLC writes to Commission on SFTs: FMLC has written to the European Commission to express its concern on the proposed regulation on the reporting and transparency of securities financing transactions (SFTs).  It is concerned the proposals:

  • do not adequately reflect the difference between a tide transfer financial collateral arrangement (TTFCA) and a security financial collateral arrangement (SFCA), despite several discussions around the differences and the need to distinguish between the two arrangements;
  • are silent as to whether a breach of the restrictions on rehypothecation could invalidate an SFT, or any contract pursuant to which collateral is rehypothecated. FMLC wants clarity that TTFCAs fall outside its scope or, if this is not possible, that it is made clear that no breach of the relevant article will affect the enforceability of an SFT or any contract involving the rehypothecation of any collateral.

(Source: FMLC Writes to Commission on SFTs)