The House of Commons European Scrutiny Committee has discussed the EU draft Regulation on reporting and transparency of securities financing transactions (SFT Regulation). This details the Government’s view that:
· any regulation must be consistent with the Financial Stability Board’s recommendations;
· reporting requirements must be proportionate and workable;
· rehypothecation consents should not be too rigid;
· overlaps with existing provisions should be taken into account
· provisions for relationships with third countries should be compatible with other relevant legislation;
· the use of delegated acts and the roles of the European Supervisory Authorities will need to be carefully scrutinised; and
· there should not be any direct financial implications for the Exchequer.
The Committee concluded that it appears that, if the proposal is enacted in the way the UK Government wishes, it would be useful in making the securities financing transactions aspect of shadow banking more transparent.