European asset manager fears onerous SFT reporting
02 March 2015 Paris
Image: Shutterstock
European asset management firm Amundi has expressed disappointment over reverse repos and securities lending being considered securities finance transactions under the Financial Stability Board’s (FSB) consultation on data collection and aggregation.
The asset manager filed its response to the FSB’s proposed standards for securities finance transaction data collection and aggregation on 12 February, which was the deadline for providing feedback.
Amundi said it is “very sorry” to see that reverse repos and securities lending are now called securities finance transactions, “a wording that does not reflect the way they are conceived by asset managers”.
Only hedge funds should be included in the scope of any regulation of securities finance transactions, argued Amundi, because asset managers rarely use repos or borrow securities.
UCITS funds should be entirely exempt from the proposed regulation, while alternative investment funds that use significant leverage “are the only ones that can present any risk at a systemic level”, argued Amudi.
Asset managers are closely regulated and supervised already, and so reporting should not be used as a means to “introduce new regulation”.
“[The proposed regulation] should remain limited to its role of getting better information in order to ensure financial stability and track systemic risk.”
FSB chair Mark Carney promised in early February to press ahead with the proposed standards for securities finance transaction data collection and aggregation, saying that an implementation timeline will be in place by the end of the year.
Twenty other parties responded to the FSB’s consultation, including the International Securities Lending Association and Markit.
The asset manager filed its response to the FSB’s proposed standards for securities finance transaction data collection and aggregation on 12 February, which was the deadline for providing feedback.
Amundi said it is “very sorry” to see that reverse repos and securities lending are now called securities finance transactions, “a wording that does not reflect the way they are conceived by asset managers”.
Only hedge funds should be included in the scope of any regulation of securities finance transactions, argued Amundi, because asset managers rarely use repos or borrow securities.
UCITS funds should be entirely exempt from the proposed regulation, while alternative investment funds that use significant leverage “are the only ones that can present any risk at a systemic level”, argued Amudi.
Asset managers are closely regulated and supervised already, and so reporting should not be used as a means to “introduce new regulation”.
“[The proposed regulation] should remain limited to its role of getting better information in order to ensure financial stability and track systemic risk.”
FSB chair Mark Carney promised in early February to press ahead with the proposed standards for securities finance transaction data collection and aggregation, saying that an implementation timeline will be in place by the end of the year.
Twenty other parties responded to the FSB’s consultation, including the International Securities Lending Association and Markit.
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