Page 22 - 2516_21_June_ISLA_Market_Report_-_March_2022_final

22 23

Securities Lending Market Report | March 2022

>>> SFTR Reporting Trends Between EU & UK >>> Single-Sided Reporting vs Dual-Sided Reporting

Fig 10 - DTCC EU, DTCC UK Fig 11 - DTCC EU, DTCC UK, REGIS-TR, KDPW

SLEB Reported On-Loan Value (EU vs UK) Single-Sided Reporting

100% 96%
90% 94%
92%
80%
90%
70% 88%
60% 86%
84%
50%
82%
40% 80%
30% Jan 2021 Feb 2021 Mar 2021 Apr 2021 May 2021 Jun 2021 Jul 2021 Aug 2021 Sep 2021 Oct 2021 Nov 2021 Dec 2021
20%
% Single-Sided Reporting (EU) % Single-Sided Reporting (EK)
10%
0%
Jan 2021 Feb 2021 Mar 2021 Apr 2021 May 2021 Jun 2021 Jul 2021 Aug 2021 Sep 2021 Oct 2021 Nov 2021 Dec 2021

EU UK

In the last ISLA market report, the post Brexit volume trends Returning to SFTR, the following graph is produced by When we compare the percentage value of reported SLEB Should this trend continue into 2022, it will be interesting
were discussed and, looking at the data today, there are still looking at the relationship of average weekly outstanding transactions which are single-sided (transactions where only to keep this in mind when looking at other market data
some interesting trends that should be noted. loan value reported within each month. It is immediately one party is captured by the relevant SFTR regime), and and also to consider whether this is a reflection of firms’
apparent that in January 2021 there was a 50/50 split of transactions which are dual-sided (both parties captured strategy, or regulatory compliance.
Before noting them however, a caveat should be applied to activity between the regions and, over the course of 2021, under one SFTR regime, and therefore the transaction
this data as it is notoriously difficult to extract a clear and that split has migrated to 60/40 and also looks to have is reconcilable), we note a marked change in European
validated picture. Considering that, we have looked not so stabilised across the last quarter. Looking at the partial counterparty relationships over 2021.
much as the specific volume numbers, but rather the overall data from January 2022, that trend seems to be continuing
relationship between them for this report. Indeed, we use which is perhaps not quite everyone’s expectation. Although the vast majority of activity was still sourced from
the same methodology to find trends in settlement rates for outside the region, the change in this metric over 2021
securities lending, which currently hover between 85-95% illustrates a 5.89% change in the selection of European
depending on transaction direction and asset class. Firms trading counterparts, compared to only 0.66% in the UK.
are particularly focused on this statistic in the first quarter
of 2022, with go-live of CDSR Penalties.