ESMA · ESMA_QA_926 Answer Published

Reporting of zero collateral for margin lending

Regulation
Securities Financing Transactions Regulation (SFTR) Regulation (EU) 2015/2365- MDP
Topic
Margin lending
Submitted
2020-11-05
Answered
2020-11-05
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Question

How should zero collateral be reported for margin lending?

Answer

[ESMA74-362-893 Q&A 5] In accordance with Article 5(2) of CIR (EU) 2019/363, counterparties should report the relevant collateral components of a margin loan as long as there is an outstanding exposure. Currently the technical standards do not allow for reporting of cash collateral for margin loans, therefore the counterparties cannot report for margin lending zero collateral in line with section 5.4.4 of the ESMA SFTR Reporting Guidelines. Counterparties should use the ISIN EU000A1G0EB6 (European Financial Stability Facility) as an agreed default value in field 2.78 (Identification of a security used as collateral) to report zero collateral for margin loans.
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This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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