The aim of Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (OJ L337/15) - SFTR (Securities financing transactions regulation) is to increase the transparency of securities financing transaction (SFTs), which are:
• a repurchase transaction - selling a security and agreeing to repurchase it in the future for the original sum of money plus a return for the use of that money,
• lending a security for a fee in return for a guarantee in the form of financial instruments or cash given by the borrower,
• a buy-sell back transaction or sell-buy back transaction,
• a margin lending transaction.
• all SFTs, except those concluded with central banks, to be reported to central databases known as trade repositories,
• information on the use of SFTs by investment funds to be disclosed to investors in the regular reports and pre-investment documents issued by the funds,
• minimum transparency conditions to be met when collateral is reused, such as disclosure of the risks and the obligation to acquire prior consent.
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