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Merry Christmas! The SFTR Enters into Force on 12 January 2016!!

An early Christmas present arrived on 23 December 2015, when the Securities Financing Transactions Regulation (SFTR) was published in the Official Journal of the EU.  For more details on the SFTR itself, see this blog post.

The SFTR enters into force on the 20th day following its publication in the Official Journal of the EU – now a date certain – being 12 January 2016.  In turn, the dates on which a number of the operative provisions of the SFTR begin to bite is now known, as set out below:

Date Event
13 July 2016 Requirements regarding reuse of financial instruments received as collateral
13 January 2017 Requirements regarding pre-contractual disclosure  by UCITS and AIFS take effect
13 January 2017 Requirements regarding periodic reporting by UCITS and AIFMs as to their use of SFTs and TRS take effect
13 January 2017 ESMA Implementing Technical Standard due on the details, format and frequency of SFT transaction reports (the actual obligation to report being staggered between 12 and 21 months thereafter depending on counterparty classification)

In practice, it may be that existing documentation is broadly sufficient to ensure compliance with the SFTR requirements due to enter force on 13 July 2016.  However, this does not obviate the need to blow the dust off agreements in order to check that this is indeed the case – an exercise sufficiently large to focus minds very early in the new year.

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