Finland Times

 

Photo AFP-Lehtikuva.

The European Union (EU) is to discuss new regulation aimed at improving the transparency of securities lending and repurchase transactions, according to an official statement on Thursday.

   

The draft regulation was agreed by the Permanent Representatives Committee, on behalf of the Council of the EU, to enhance financial stability by ensuring that information on so-called securities financing transactions is efficiently reported to trade repositories and investors in collective investment undertakings.

     

Securities financing transactions, often carried out by the shadow banking sector, rely on assets belonging to the counterparty to generate financing.

     

The draft regulation introduces measures to improve transparency in three main areas: monitoring of the build-up of systemic risks in the financial system related to securities financing transactions, the disclosure of information on such transactions to investors whose assets are employed in the transactions, and rehypothecation activities.