Published: 28th June 2017

SFTR – Transparency Requirements for UCITS and AIFs

Of Relevance to:
UCITS Management Companies and AIFMs


Although the principal requirement under the Securities Financing Transactions Regulation (2015/2365) (“SFTR”) is the obligation on counterparties to securities financing transactions (“SFT”) to report details of any concluded SFTs to a trade repository, it also brought transparency requirements – see Regulatory Roundup 72 for further information on the SFTR as a whole, including on the reuse of collateral.

A SFT is defined in Article 3(11) of the SFTR as:

  • a repurchase transaction
  • securities or commodities lending and securities or commodities borrowing
  • a buy-sell back transaction or sell-buy back transaction
  • a margin lending transaction

By virtue of recital 7 of the SFTR, the definition of a SFT does not include derivative contracts as defined in EMIR, but does include transactions that are commonly referred to as liquidity swaps and collateral swaps which do not fall under the definition of derivative contracts under EMIR.

The transparency obligations for UCITS Management Companies and AIFMs arise under Article 13 (periodical reports) and Article 14 (pre-contractual documentation – UCITS prospectus and AIFMs disclosures to investors).

The transparency obligations under Article 13 applied from 13 January 2017 (see Regulatory Roundup 84).

As mentioned in the above Regulatory Roundup, the transparency obligations under Article 14 will apply from 13 July 2017.

Note that transparency obligations under Article 13 and Article 14 concern both the use of SFTs and total return swaps.

The requirements are copied out into the Handbook as follows (transitional provisions in place ensure that the requirements do not take effect until 13 July 2017):

  • UCITS and NURS: COLL 4.2.5A
  • Qualified Investor Schemes: COLL 8.3.4A
  • AIFs: FUND 3.2.4A

There is no obligation to include information on the above in pre-sale documentation where SFTs or total return swaps are not used (see COLL 4.2.5A(4) or COLL 8.3.4A(4) or FUND 3.2.4A(3) as relevant).

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