Letter of Credit as Collateral

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Status: Best Practice Finalised, Last Updated: 26/04/2021

Question:
How should Letters of Credit be reported under SFTR?

Best Practice:
Members who have Letter of Credit should refer to their legal and/or compliance department for guidance as there is nothing in the regulations that specifically reference LOCs.

For information, we note that some member firms have taken the view that LOC's are not reportable as no transfer of title occurs and collateral is not realised until a default scenario. (SFTR-249)