ASL: Amendment to Securities Lending and Borrowing Rules

Clearstream Banking¹ would like to inform customers that effective

5 August 2020

it will modify the Securities Lending and Borrowing Rules (“the Rules”) to reflect new requirements that come with the implementation and entry into force of Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions (SFTR) starting from 13 July 2020.

The modifications will affect Appendix A (“Letter of Agreement and Acceptance”) of the Rules and will introduce a new Appendix H (“Regulatory reporting obligation for securities financing transactions”).

Background

SFTR came into force on 12 January 2016 introducing reporting requirements for securities financing transactions (SFTs) as from 13 July 2020. SFTR requires in-scope entities to report certain data including counterparty identification, loan and collateral composition, margin and reuse in relation to SFTs concluded by the counterparties, together known as “Transaction Data”, to a trade repository which is registered or recognised in accordance with SFTR.

This reporting obligation will apply in relation to transactions entered into by Clearstream Banking S.A. (CBL), as principal or as agent, in the context of its securities lending services, such as ASL, ASLplus or ASL principal.

In order to comply with SFTR reporting obligations, CBL has established a reporting chain applicable to the Transaction Data which involves the use of a third party service provider for Transaction Data formatting and reporting, data warehouse and reconciliation services, as well as access and connectivity to a duly registered Trade Repository.

Such use of a third-party service provider involves the disclosure of Transaction Data and therefore requires customer acknowledgement and consent. The Rules will be modified to account for these new requirements.

Further information

The new version of the Securities Lending and Borrowing Rules, showing the amended sections, is available under ASL legal documentation.

For further information about the products and services, customers may contact Clearstream Banking Client Services or their Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.