Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (Text with EEA relevance)

CHAPTER I

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Subject matter

This Regulation lays down rules on the transparency of securities financing transactions (SFTs) and of reuse.

Article 2

Scope

This Regulation applies to:

(a) a counterparty to an SFT that is established: (i) in the Union, including all its branches irrespective of where they are located; (ii) in a third country, if the SFT is concluded in the course of the operations of a branch in the Union of that counterparty;

(b) management companies of undertakings for collective investment in transferable securities (UCITS) and UCITS investment companies in accordance with Directive 2009/65/EC;

(c) managers of alternative investment funds (AIFMs) authorised in accordance with Directive 2011/61/EU;

(d) a counterparty engaging in reuse that is established: (i) in the Union, including all its branches irrespective of where they are located; (ii) in a third country, where either: — the reuse is effected in the course of the operations of a branch in the Union of that counterparty, or — the reuse concerns financial instruments provided under a collateral arrangement by a counterparty established in the Union or a branch in the Union of a counterparty established in a third country.

Articles 4 and 15 do not apply to:

(a) members of the European System of Central Banks (ESCB), other Member States’ bodies performing similar functions, and other Union public bodies charged with, or intervening in, the management of the public debt;

(b) the Bank for International Settlements;

(c) the central bank and other bodies performing similar functions and other public bodies charged with, or intervening in, the management of the public debt in the United Kingdom of Great Britain and Northern Ireland.

To that end and before adopting such delegated acts, the Commission shall present to the European Parliament and to the Council a report assessing the international treatment of central banks and of public bodies charged with or intervening in the management of the public debt.

That report shall include a comparative analysis of the treatment of central banks and of those bodies within the legal framework of a number of third countries. Provided that the report concludes, in particular with regard to the comparative analysis and potential effects, that the exemption of the monetary responsibilities of those third-country central banks and bodies from Article 15 is necessary, the Commission shall adopt a delegated act adding them to the list set out in paragraph 2 of this Article.

Article 3

Definitions

For purposes of this Regulation, the following definitions apply:

(1) ‘trade repository’ means a legal person that centrally collects and maintains the records of SFTs;

(2) ‘counterparties’ means financial counterparties and non-financial counterparties;

(3) ‘financial counterparty’ means: (a) an investment firm authorised in accordance with Directive 2014/65/EU of the European Parliament and of the Council (¹); (b) a credit institution authorised in accordance with Directive 2013/36/EU of the European Parliament and of the Council (²) or with Regulation (EU) No 1024/2013; (c) an insurance undertaking or a reinsurance undertaking authorised in accordance with Directive 2009/138/EC of the European Parliament and of the Council (³); (d) a UCITS and, where relevant, its management company, authorised in accordance with Directive 2009/65/EC; (e) an AIF managed by AIFMs authorised or registered in accordance with Directive 2011/61/EU; (f) an institution for occupational retirement provision authorised or registered in accordance with Directive 2003/41/EC of the European Parliament and of the Council (⁴); (g) a central counterparty authorised in accordance with Regulation (EU) No 648/2012; (h) a central securities depository authorised in accordance with Regulation (EU) No 909/2014 of the European Parliament and of the Council (⁵); (i) a third-country entity which would require authorisation or registration in accordance with the legislative acts referred to in points (a) to (h) if it were established in the Union;

(4) ‘non-financial counterparty’ means an undertaking established in the Union or in a third country other than the entities referred to in point (3);

(5) ‘established’ means: (a) if the counterparty is a natural person, where it has its head office; (b) if the counterparty is a legal person, where it has its registered office; (c) if the counterparty has, under its national law, no registered office, where it has its head office;

(6) ‘branch’ means a place of business other than the head office which is part of a counterparty and which has no legal personality;

(7) ‘securities or commodities lending’ or ‘securities or commodities borrowing’ means a transaction by which a counterparty transfers securities or commodities subject to a commitment that the borrower will return equivalent securities or commodities on a future date or when requested to do so by the transferor, that transaction being considered as securities or commodities lending for the counterparty transferring the securities or commodities and being considered as securities or commodities borrowing for the counterparty to which they are transferred;

(8) ‘buy-sell back transaction’ or ‘sell-buy back transaction’ means a transaction by which a counterparty buys or sells securities, commodities, or guaranteed rights relating to title to securities or commodities, agreeing, respectively, to sell or to buy back securities, commodities or such guaranteed rights of the same description at a specified price on a future date, that transaction being a buy-sell back transaction for the counterparty buying the securities, commodities or guaranteed rights, and a sell-buy back transaction for the counterparty selling them, such buy-sell back transaction or sell-buy back transaction not being governed by a repurchase agreement or by a reverse-repurchase agreement within the meaning of point (9);

(9) ‘repurchase transaction’ means a transaction governed by an agreement by which a counterparty transfers securities, commodities, or guaranteed rights relating to title to securities or commodities where that guarantee is issued by a recognised exchange which holds the rights to the securities or commodities and the agreement does not allow a counterparty to transfer or pledge a particular security or commodity to more than one counterparty at a time, subject to a commitment to repurchase them, or substituted securities or commodities of the same description at a specified price on a future date specified, or to be specified, by the transferor, being a repurchase agreement for the counterparty selling the securities or commodities and a reverse repurchase agreement for the counterparty buying them;

(10) ‘margin lending transaction’ means a transaction in which a counterparty extends credit in connection with the purchase, sale, carrying or trading of securities, but not including other loans that are secured by collateral in the form of securities;

(11) ‘securities financing transaction’ or ‘SFT’ means: (a) a repurchase transaction; (b) securities or commodities lending and securities or commodities borrowing; (c) a buy-sell back transaction or sell-buy back transaction; (d) a margin lending transaction;

(12) ‘reuse’ means the use by a receiving counterparty, in its own name and on its own account or on the account of another counterparty, including any natural person, of financial instruments received under a collateral arrangement, such use comprising transfer of title or exercise of a right of use in accordance with Article 5 of Directive 2002/47/EC but not including the liquidation of a financial instrument in the event of default of the providing counterparty;

(13) ‘title transfer collateral arrangement’ means a title transfer financial collateral arrangement as defined in point (b) of Article 2(1) of Directive 2002/47/EC concluded between counterparties to secure any obligation;

(14) ‘security collateral arrangement’ means a security financial collateral arrangement as defined in point (c) of Article 2(1) of Directive 2002/47/EC concluded between counterparties to secure any obligation;

(15) ‘collateral arrangement’ means a title transfer collateral arrangement and security collateral arrangement;

(16) ‘financial instrument’ means a financial instrument as defined in point (15) of Article 4(1) of Directive 2014/65/EU;

(17) ‘commodity’ means a commodity as defined in point (1) of Article 2 of Commission Regulation (EC) No 1287/2006 (⁶);

(18) ‘total return swap’ means a derivative contract as defined in point (7) of Article 2 of Regulation (EU) No 648/2012 in which one counterparty transfers the total economic performance, including income from interest and fees, gains and losses from price movements, and credit losses, of a reference obligation to another counterparty.

CHAPTER II

TRANSPARENCY OF SFTS

Article 4

Reporting obligation and safeguarding in respect of SFTs

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).

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.

In those cases, ESMA shall ensure that all of the relevant entities referred to in Article 12(2) have access to all of the details of SFTs they need to fulfil their respective responsibilities and mandates.

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, ESMA shall, in close cooperation with, and taking into account the needs of, the ESCB, develop draft 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.

In developing those draft technical standards, ESMA 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.

ESMA shall submit those draft regulatory technical standards to the Commission by 13 January 2017.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

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.

In developing those draft technical standards, ESMA shall take into account international developments and standards agreed at Union or global level.

ESMA shall submit those draft implementing technical standards to the Commission by 13 January 2017.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

CHAPTER III

REGISTRATION AND SUPERVISION OF A TRADE REPOSITORY

Article 5

Registration of a trade repository

A trade repository shall submit to ESMA either of the following:

(a) an application for registration;

(b) an application for an extension of registration for the purposes of Article 4 of this Regulation in the case of a trade repository already registered under Title VI, Chapter 1 of Regulation (EU) No 648/2012.

Where the application is not complete, ESMA shall set a deadline by which the trade repository is to provide additional information.

After assessing an application as complete, ESMA shall notify the trade repository accordingly.

In order to ensure consistent application of this Article, ESMA shall develop draft regulatory technical standards specifying the details of all of the following:

(a) the procedures referred to in paragraph 2 of this Article and which are to be applied by trade repositories in order to verify the completeness and correctness of the details reported to them under Article 4(1);

(b) the application for registration referred to in point (a) of paragraph 5;

(c) a simplified application for an extension of registration referred to in point (b) of paragraph 5 in order to avoid duplicate requirements.

ESMA shall submit those draft regulatory technical standards to the Commission by 13 January 2017.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

In order to ensure uniform conditions of application of paragraphs 1 and 2, ESMA shall develop draft implementing technical standards specifying the format of both of the following:

(a) the application for registration referred to in point (a) of paragraph 5;

(b) the application for an extension of registration referred to in point (b) of paragraph 5.

With regard to point (b) of the first subparagraph, ESMA shall develop a simplified format to avoid duplicate procedures.

ESMA shall submit those draft implementing technical standards to the Commission by 13 January 2017.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

Article 6

Notification of and consultation with competent authorities prior to registration or extension of registration

Article 7

Examination of the application

Article 8

Notification of ESMA decisions relating to registration or extension of registration

ESMA shall, without undue delay, notify the competent authority as referred to in Article 6(1) of its decision.

Article 9

Powers of ESMA

Article 10

Withdrawal of registration

Without prejudice to Article 73 of Regulation (EU) No 648/2012, ESMA shall withdraw the registration of a trade repository where the trade repository:

(a) expressly renounces the registration or has provided no services for the preceding six months;

(b) obtained the registration by making false statements or by other irregular means;

(c) no longer meets the conditions under which it was registered.

Article 11

Supervisory fees

Where a trade repository has already been registered under Title VI, Chapter 1, of Regulation (EU) No 648/2012, the fees referred to in the first subparagraph of this paragraph shall only be adjusted to reflect additional necessary expenditure and costs relating to the registration, recognition and supervision of trade repositories pursuant to this Regulation.

Article 12

Transparency and availability of data held in a trade repository

A trade repository shall collect and maintain the details of SFTs and shall ensure that the following entities have direct and immediate access to these details to enable them to fulfil their respective responsibilities and mandates:

(a) ESMA;

(b) the European Supervisory Authority (European Banking Authority) (‘EBA’);

(c) the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (‘EIOPA’);

(d) the ESRB;

(e) the competent authority supervising the trading venues of the reported transactions;

(f) the relevant members of the ESCB, including the European Central Bank (ECB) in carrying out its tasks within a single supervisory mechanism under Regulation (EU) No 1024/2013;

(g) the relevant authorities of a third country in respect of which an implementing act pursuant to Article 19(1) has been adopted;

(h) supervisory authorities designated under Article 4 of Directive 2004/25/EC of the European Parliament and of the Council (⁸);

(i) the relevant Union securities and market authorities whose respective supervisory responsibilities and mandates cover transactions, markets, participants and assets which fall within the scope of this Regulation;

(j) the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No 713/2009 of the European Parliament and of the Council (⁹);

(k) the resolution authorities designated under Article 3 of Directive 2014/59/EU of the European Parliament and the Council (¹⁰);

(l) the Single Resolution Board established by Regulation (EU) No 806/2014 of the European Parliament and of the Council (¹¹);

(m) the authorities referred to in Article 16(1);

(n) the resolution authorities designated under Article 3 of Regulation (EU) 2021/23 of the European Parliament and of the Council (¹²).

In order to ensure consistent application of this Article, ESMA shall, in close cooperation with the ESCB and taking into account the needs of the entities referred to in paragraph 2, develop draft regulatory technical standards specifying:

(a) the frequency and the details of the aggregate positions referred to in paragraph 1 and the details of SFTs referred to in paragraph 2;

(b) the operational standards required, to allow the timely, structured and comprehensive: (i) collection of data by trade repositories; (ii) aggregation and comparison of data across repositories;

(c) the details of the information to which the entities referred to in paragraph 2 are to have access, taking into account their mandate and their specific needs;

(d) the terms and conditions under which the entities referred to in paragraph 2 are to have direct and immediate access to data held in trade repositories.