Amundi Calls for SFT Reporting Exemption for Asset Managers

Amundi, Europe’s largest asset manager, has called for an exemption for asset managers under proposed repo and securities lending reporting rules, but argues hedge funds should come under the regulatory scope.

In a response to the Financial Stability Board’s (FSB) consultation on the rules, Amundi says “in the asset management industry, only hedge funds should be included in the scope of any regulation of SFTs (securities financing transactions).” Amundi argues hedge funds are the main users of repos and securities borrowing, and therefore should fall under the rules.

The FSB is planning rules on the collection of data from the securities financing market, whereby firms will have to report their repo and securities lending activities to national and regional regulators. It is looking to finalize the rules by the end of the year.

But Amundi contends the fact that certain ‘reverse repo’ and securities lending has come under the definition of SFT: “a wording that does not reflect the way they are conceived by asset managers.

“The asset management industry is extremely closely regulated and supervised and should be exempted from regulations and reporting that apply to entities that use the same techniques for another purpose.”

Under existing European rules, UCITS funds cannot repo more than 10% of their assets, and are prevented from reusing collateral received. In addition, asset managers are also bound by derivative reporting rules set out in the European Markets Infrastructure Regulation (EMIR). Therefore Amundi states that a new type of reporting for SFTs for asset managers in “unnecessary”.

Furthermore in a response from the BVI, which represents the German investment fund and asset management industry, it states securities financing transactions conducted by German UCITS managers “cannot be considered as a source of systemic risk due to the already implemented regulation on securities lending and repo.”