New EU Regulation on Securities Financing Transactions and Reuse of Collateral

December 23, 2015

The regulation on transparency of securities financing transactions and of reuse (the “Regulation”) was published in the Official Journal on 23 December 2015. The Regulation will eventually bring an EMIR-style transaction reporting regime to securities lending, requiring counterparties to report securities financing transactions to a trade repository. UCITS management and investment companies, along with AIFMs, will need to ensure that securities financing arrangements are adequately disclosed on both a periodical and pre-contractual basis, as prescribed by the Regulation. Counterparties generally will need to assess their rehypothecation and collateral reuse arrangements.

Though further details on this Regulation are expected over the next twelve months in the form of regulatory technical standards, it is important for affected parties to seek clear legal advice on these new obligations to ensure timely and cost-efficient compliance.

Read "New EU Regulation on Securities Financing Transactions and Reuse of Collateral".