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Securities Lending Market Report | June 2022

Exploring SFTR Data

Introduction >>> Pledge Collateral

The reporting of data under Securities Financing Transaction Regulation (SFTR) is now a well-established
process. However, it still has the capacity to surprise and generate new discussions Fig 9 - REGIS-TR, KDPW, DTCC EU, DTCC UK
At ISLA, we still receive regular queries on the regulation, from reporting firms struggling with the complexity of
reporting to healthy enquiries from academics analysing the implication of regulators collecting such a deep data Percentage of Collateral Reported as Pledge (EU vs UK)
set. At a high level, there continues to be a wide acceptance that SFTR is a benefit to the regulatory community
and beneficial side-effects for the industry. 20.00
18.00
On a more practical note, ISLA compiled and published a list of outstanding challenges and issues that member 16.00
firms encounter. That list has been circulated to regulatory bodies and national competent authorities (NCA), 14.00
not just to highlight outstanding challenges but also to propose solutions to those challenges. Our hope is that 12.00
our list, in addition to those compiled by other trades assocations, will be considered within the overdue but 10.00
upcoming SFTR review in 2023. 8.00
6.00
As noted in the last market report, we continue to watch for developments of similar reporting obligations in 4.00
other jurisdictions such as the European Free Trade Association (EFTA) and Securities and Exchange Commission 2.00
(SEC) proposal. 0.00

In the following pages we explore potential trends revealed by the publicly available trade repository data and, as Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 Mar 22 Apr 22 May 22 Jun 22
usual, caveat our data as it continues to be notoriously difficult to drawn down and collate.
EU UK

Previous market reports we provided a graph highlighting Whilst we are less sure that the growth in individual
the use of security interest arrangements. In the last report, jurisdictions is the most noteworthy feature, the overall
with data up to the end of 2021, it looked as if the trend trend seems quite clear, and we would still attribute this to
was somewhat trailing off. However, in the latest data set, the rolling impacts of BASLE4 across the industry.
we note a resurgence in the use of securities interest, not
just across the EU data more noticeably in the UK.