UK Securities Financing Transactions Regulation (UK SFTR)

The UK SFTR introduces requirements to improve transparency and monitor the risks associated with the securities financing transactions market. Read our overview of the Regulation.

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You can register to receive email updates on UK SFTR from us. These include:

  • information on the SFTR implementation
  • alerts when new documents or further guidance are published, and 

To register to receive updates, email your name and contact details (including email address) to [email protected].

Unsubscribe at any time by emailing ‘unsubscribe’ and your name and email address to the same address. 

Regulation

Now that the transition period has ended, UK SFTR directly applies in the UK.

The EU regulation has been onshored under the European Union (Withdrawal) Act 2018, and the regime is now known as UK SFTR.

On 23 June 2020, a Written Ministerial Statement was presented to Parliament, confirming the UK approach to onshoring the SFTR. The statement confirmed that the UK won’t implement the UK SFTR reporting obligation for non-financial counterparties (NFCs), which did not apply before the end of the transition period.

As a result, we don’t require NFCs established in the UK, or their third country branches, to put in place arrangements to meet the reporting obligation under the UK SFTR regime. 

Temporary transitional power

The Treasury gave UK financial regulators the power to make transitional provisions to financial services legislation for a temporary period. This was known as the Temporary Transitional Power (TTP).

Our use of the TTP has ended and firms must fully comply with UK onshored regulatory obligations. The TTP as laid out in Treasury legislation expires on 31 December 2022. However, in line with agreed timescales we stopped using the power on 31 March 2022, except in relation to the Share Trading Obligation (STO) and the Derivative Trading Obligation (DTO).

We continue to monitor market and regulatory developments and will review our approach if necessary.

However, there were some areas where we did not apply the TTP, including to key requirements for UK SFTR reporting obligations.

The TTP applied to SFTs where one of the counterparties is a member of the European System of Central Banks (ESCB). For these transactions, the status quo was retained and UK counterparties did not need to report these transactions under UK SFTR until 31 March 2022.

However, where firms are subject to UK MiFIR transaction reporting obligations, they did need to report these SFTs to us under the UK MiFIR if the counterparty is a member of the ESCB.

The Bank of England confirmed its approach to transitioning to post-exit rules and standards for which it is the applicable supervisor (for the purposes of UK SFTR, the reporting obligation for CCPs and CSDs).

UK SFTR

The EU SFTR applied, in part, from 12 January 2016 and aims to improve transparency of securities financing transactions (SFTs). It implements recommendations following the Financial Stability Board (FSB) review of the shadow banking sector after the financial crisis.

EU SFTR is onshored as UK SFTR.  It imposes requirements on UK counterparties, and third-country branches of UK established counterparties that enter into SFTs such as:

  • repo transactions
  • securities lending transactions
  • margin lending transactions
  • commodities lending transactions

In addition, UK SFTR has registration and operational requirements for TRs offering UK SFTR repository services, and defined levels of access to data for different authorities.

UK SFTR requires entities that are in-scope to:

  • report details of their SFTs to an FCA registered or recognised TR
  • in the case of funds, meet disclosure requirements regarding the use of securities financing transactions and total return swaps in pre-investment documentation and regular reports to investors
  • comply with disclosure obligations to counterparties regarding the re-use of collateral

For more information on which counterparties are in scope of UK SFTR, please see the SFTR reporting obligation webpage.

SFTR Implementation timetable

11pm 31 December 2020

UK SFTR becomes applicable.

11 September 2020

Reporting obligation becomes applicable for phase 3 firms.

11 July 2020

Reporting obligation becomes applicable for phase 2 firms.

11 April 2020

Reporting obligation becomes applicable for phase 1 firms. 

11 April 2019

Technical standards in relation to reporting requirements and requirements for TRs entered into application.

13 July 2017

Disclosures by funds on the use of securities financing transactions entered into application (for pre-contractual documents).

13 January 2017

Disclosures by funds on the use of securities financing transactions entered into application (for periodic reporting).

13 July 2016

Conditions for re-use of collateral entered into application.

12 January 2016

EU SFTR came into force.

SFTR queries

Firms can email [email protected] for any SFTR queries.

Page updates

31/03/2022: Information changed To reflect that our use of the TTP has ended
24/02/2022: Editorial amendment 3 minor edits to improve readability
30/10/2020: Information added The Technical Standards (Securities Financing Transactions Regulation (EU Exit) (No 2) Instrument 2020
01/10/2020: Information added Update in highlight box on key requirements for firms