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The agreement follows negotiations between the Commission, the European Parliament and the Council of the EU to find common ground on the regulation. The agreement will significantly improve the transparency of securities financing transactions and help identify their risks and their magnitude.
Securities financing transactions allow market participants to access secured funding, i.e. to use their assets to secure financing for their activities. This involves the temporary exchange of assets as a guarantee for a funding transaction (e.g. the lending or borrowing of securities, repurchase or reverse repurchase transactions, buy-sell back or sell-buy back transactions, or margin lending transactions).
"Today's agreement is an important step forward in bringing transparency in securities financing markets," said Jonathan Hill, EU Commissioner responsible for Financial Stability, Financial Services and Capital Markets Union. "These activities are important for the financing of the economy and the right kind of oversight will make it easier to monitor and assess the risks involved."
The formal adoption of the proposal is expected later this year.