Read our news updates on the UK Securities Financing Transactions Regulation (UK SFTR).
Reporting Legal Entity Identifiers (LEIs) of non-EEA third country issuers under UK SFTR
Under Article 4 UK SFTR, reporting counterparties must use LEIs to identify entities when submitting transaction reports under UK SFTR.
In January 2020, ESMA granted 12 months of forbearance from the entry into force of SFTR reporting requirements in relation to the reporting of LEIs of non-EEA third country issuers under the reporting technical standard. While the industry has made progress in encouraging more widespread LEI coverage among non-EEA third country issuers, we recognise that there are still many non-EEA third country issuers without a LEI.
To reduce market disruption, we are extending the period during which reports under UK SFTR without the LEI of a non-EEA third country issuer will be accepted until at least 13 April 2022. In the meantime, we expect reporting counterparties to continue engaging with non-EEA third country issuers to acquire a LEI. We also expect reporting counterparties to report a LEI for non-EEA third country issuers where available.
Approach to reporting references to LIBOR in securities financing transactions under UK SFTR
For UK SFTR reporting, it’s essential that the UK SFTR transaction data accurately reflects the details of the transaction.
Under Article 4 UK SFTR, counterparties to SFTs must report any modification of an SFT they have concluded to a registered or recognised trade repository no later than the working day following the modification of the transaction.
If the terms of a securities financing transaction say that, either immediately or at some other point in time, an alternative rate applies in the place of LIBOR, this would bring about a modification that is reportable under UK SFTR. We would expect this modification to be reported at the time that the alternative rate takes effect. This applies to all agreed terms that result in an alternative rate applying in place of LIBOR.
While we expect you to make the necessary preparations to ensure the relevant UK SFTR reports are updated in a timely manner, we will apply our supervisory powers for this requirement in a proportionate and risk-based manner.