CHAPTER IIU.K. TRANSPARENCY OF SFTS

Article 4U.K.Reporting obligation and safeguarding in respect of SFTs

1.Counterparties to SFTs shall report the details of any SFT they have concluded, as well as any modification or termination thereof, to a trade repository registered in accordance with Article 5 or recognised in accordance with Article 19. Those details shall be reported no later than the working day following the conclusion, modification or termination of the transaction.

The reporting obligation laid down in the first subparagraph shall apply to SFTs which:

(a)were concluded before the relevant date of application referred to in point (a) of Article 33(2) and remain outstanding on that date, if:

(i)

the remaining maturity of those SFTs on that date exceeds 180 days; or

(ii)

those SFTs have an open maturity and remain outstanding 180 days after that date;

(b)are concluded on or after the relevant date of application referred to in point (a) of Article 33(2).

The SFTs referred to in point (a) of the second subparagraph shall be reported within 190 days of the relevant date of application referred to in point (a) of Article 33(2).

2.A counterparty which is subject to the reporting obligation may delegate the reporting of the details of SFTs.

3.Where a financial counterparty concludes an SFT with a non-financial counterparty which on its balance sheet dates does not exceed the limits of at least two of the three criteria laid down in Article 3(3) of Directive 2013/34/EU of the European Parliament and of the Council(1), the financial counterparty shall be responsible for reporting on behalf of both counterparties.

Where a UCITS managed by a management company is the counterparty to SFTs, the management company shall be responsible for reporting on behalf of that UCITS.

Where an AIF is the counterparty to SFTs, its AIFM shall be responsible for reporting on behalf of that AIF.

4.Counterparties shall keep a record of any SFT that they have concluded, modified or terminated for at least five years following the termination of the transaction.

[F15.Where a trade repository is not available to record the details of SFTs:

(a)except where the FCA has suspended the reporting obligation under point (b), counterparties shall ensure that such details are reported to the FCA. In this case the FCA shall ensure that all the relevant entities referred to in Article 12(2) have access to all the details of SFTs they need to fulfil their respective responsibilities and mandates;

(b)the FCA may, having:

(i)provided a report to the Treasury setting out its reasons for suspending the reporting obligation in point (a);

(ii)specified a date:

(aa)on which the suspension of that obligation will end; and

(bb)by which it anticipates counterparties will be able to report details of any SFTs as set out in paragraph 5a; and

(iii)consulted the Treasury and the Bank of England,

with the consent of the Treasury, suspend the reporting obligation in point (a) for a period of up to one year;

(c)the Treasury may by regulations amend point (b) so as to extend the period for the time being specified in that provision.

5a.Details of any SFTs that counterparties have concluded, and of any modification or termination of the SFT, that have not been reported to a trade repository in accordance with the reporting obligations in paragraph 1 during a period when the FCA has suspended the reporting obligation under paragraph (5)(b), must be reported by those counterparties to a trade repository following the end of the suspension of the reporting obligation by no later than the end of the period specified by the FCA for this purpose.]

6.In respect of information received under this Article, trade repositories F2... shall comply with the obligations set out in particular in Article 80 of Regulation (EU) No 648/2012. For the purposes of this Article, references in Article 80 of Regulation (EU) No 648/2012 to Article 9 thereof and to ‘derivative contracts’ shall be construed as references to this Article and to ‘SFTs’ respectively.

7.A counterparty that reports the details of an SFT to a trade repository or to [F3the FCA], or an entity that reports such details on behalf of a counterparty shall not be considered to infringe any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision.

8.No liability resulting from that disclosure shall lie with the reporting entity or its directors or employees.

9.In order to ensure consistent application of this Article and in order to ensure consistency with the reporting made under Article 9 of Regulation (EU) No 648/2012 and internationally agreed standards, [F4the Bank of England and the FCA shall make] regulatory technical standards specifying the details of the reports referred to in paragraphs 1 and 5 of this Article for the different types of SFTs that shall include at least:

(a)the parties to the SFT and, where different, the beneficiary of the rights and obligations arising therefrom;

(b)the principal amount; the currency; the assets used as collateral and their type, quality, and value; the method used to provide collateral; whether collateral is available for reuse; in cases where the collateral is distinguishable from other assets, whether it has been reused; any substitution of the collateral; the repurchase rate, lending fee or margin lending rate; any haircut; the value date; the maturity date; the first callable date; and the market segment;

(c)depending on the SFT, details of the following:

(i)

cash collateral reinvestment;

(ii)

securities or commodities being lent or borrowed.

[F5In making those technical standards the Bank of England and the FCA] shall take into account the technical specificities of pools of assets and shall provide for the possibility of reporting position level collateral data where appropriate.

[F6The Bank of England shall make the regulatory standards referred to in the first subparagraph which apply to CCPs and central securities depositories authorised in accordance with Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012.

The FCA shall make the regulatory standards referred to in the first subparagraph which apply to other counterparties.]

F7...

10.In order to ensure uniform conditions of application of paragraph 1 of this Article and, to the extent feasible, consistency with the reporting pursuant to Article 9 of Regulation (EU) No 648/2012 and harmonisation of formats between trade repositories, [F8the Bank of England and the FCA shall make] implementing technical standards specifying the format and frequency of the reports referred to in paragraphs 1 and 5 of this Article for the different types of SFTs.

The format shall include, in particular:

(a)global legal entity identifiers (LEIs), or pre-LEIs until the global legal entity identifier system is fully implemented;

(b)international securities identification numbers (ISINs); and

(c)unique trade identifiers.

[F9The Bank of England shall make the implementing standards referred to in the first subparagraph which apply to CCPs and central securities depositories authorised in accordance with Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012.

The FCA shall make the implementing standards referred to in the first subparagraph which apply to other counterparties.]

[F10In making those technical standards, the Bank of England and the FCA] shall take into account international developments and standards agreed at [F11national ] or global level.

F12...

Textual Amendments

(1)

Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).