Alternative Investment Management Association Representing the global hedge fund industry
On 29 January 2014, the European Commission issued a legislative proposal for a European Regulation on the transparency of securities financing transactions (SFTs). This proposal sits alongside the banking structural reforms proposal also issued on 29 January 2014 and is intended, among other things, to prevent circumvention of the latter by banking entities shifting their activities over to the shadow banking sector.
Relevant requirements include:
This proposal follows the recommendations made within the Financial Stability Board (FSB) report of August 2013 on a policy framework for addressing shadow banking risks in securities lending and repos, as well as a European Commission Communication on shadow banking in September 2013.
The proposal will now pass to the European Parliament (EP) and Council of the European Union for disucssion. Although, due to the EP elections, it is likely that progress will not be made on this file until late 2014/early 2015.
AIMA has drafted a Summary and Position Paper on the Proposal.
European Commission Green Paper - Shadow Banking (March 2012)
EC Communication on Shadow Banking (September 2013)
ECON Report on Shadow Banking (2012/2115(INI)) (25 October 2012)