The mandatory reporting of securities financing transactions is
designed to enhance transparency on shadow banking activities.
The European Union's new reporting requirement under
Regulation (EU) 2015/2365 of November 25, 2015—known as the
Securities Financing Transactions Regulation
("SFTR")—will go into effect beginning on April 11,
2020, for credit institutions and investment firms and on January
11, 2021, for non-financial counterparties. The mandatory reporting
of securities financing transactions ("SFT") to
authorized or recognized trade repositories constitutes the third
and final pillar of the SFTR, designed to enhance transparency on
shadow banking activities.
The in-scope SFTs encompass repurchase transactions, securities
or commodities lending transactions, and buy-sell backs. They also
include margin lending transactions, which are defined as an
extension of credit "in connection with the purchase, sale,
carrying or trading of securities, but not