Brussels, 20/11/2014 (Agence Europe) - On Thursday 20 November, the Council of the EU reached a political agreement in principle on a draft regulation aiming to improve the transparency of certain securities financing operations used in the parallel banking sector.
In order to prevent another proposed regulation on the structural reform of banks from causing banking activities to move across to shadow banking (EUROPE 11007), the legislative proposal brings in transparency and reporting requirements for securities financing operations (repurchasing, loans of securities) to the central trade repositories and investors in collective investment undertakings. Transparency is to be improved in three areas: - the monitoring of the build-up of systemic risks in the financial system relating to securities financing transactions; - the disclosure of information on such transactions to investors whose assets are employed in the transactions; - rehypothecation activities, a practice by banks or brokers of reusing for their own purposes collateral pledged by their clients. (MB)