UK SFTR news

Read our news updates on the UK Securities Financing Transactions Regulation (UK SFTR).

March 2022  

Reporting Legal Entity Identifiers (LEIs) of non-EEA third country issuers under UK SFTR 

In April 2021, we extended a period of forbearance for the reporting of LEIs of non-EEA third country issuers under UK SFTR. This was put in place to reduce potential market disruption resulting from the large number of non-EEA third country issuers without a LEI. This forbearance is due to expire on 13 April 2022. 

Whilst industry has made further progress in wider LEI coverage, we are aware that many non-EEA third country issuers have still not acquired a LEI which may impact reporting under UK SFTR after 13 April 2022.

In recognition of this, 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 13 October 2022. 

Reporting counterparties should report a LEI for non-EEA third country issuers where one is available and continue engaging with non-EEA third country issuers to encourage them to acquire a LEI if not.

March 2022

Reporting of SFTs with members of the European System of Central Banks (ESCB)

The Temporary Transitional Power (TTP) has been in effect since the end of the transition period and was applied in the case of the UK SFTR to securities financing transactions (SFTs). 

For transactions where one of the counterparties is a member of the European System of Central Banks (ESCB), the status quo was retained, and financial counterparties did not need to report these transactions under UK SFTR for the duration of the TTP. 

The TTP will expire, for these purposes, on 31 March 2022. Once the TTP expires, UK counterparties subject to UK SFTR requirements will be required to report these transactions under UK SFTR. 

We expect firms to review their reporting systems and make the necessary changes to ensure that any new and outstanding SFTs with members of the ESCB are reported as soon as possible after 1 April 2022. To avoid duplicative reporting, from 1 April 2022, SFTs will no longer be reportable under UK MiFIR (see chapter 3 relating to the Technical Standards (Markets in Financial Instruments) (Transaction Reporting) Instrument 2022 in Handbook Notice No. 96). 

October 2021

Updated UK SFTR validation rules

On 14 October 2021, we published an update to the UK SFTR validation rules, to further facilitate reporting by firms following the end of the transition period. These amendments will apply from 11 April 2022.

Firms should continue to use existing UK SFTR validation rules until that date. Please note the amendments to the UK SFTR validation rules coming into effect on 11 April 2022 are marked in red.

Note: the go-live date is now 11 April 2022, changed from 14 April 2022 when this update was first posted.

April 2021

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.

March 2021

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.

Page updates

01/04/2022: Information added