SFTR Reporting – Non-EU AIFs Out of Scope

February 7, 2020 by ACA Compliance Group


The European Securities Market Authority ("ESMA") and the European Commission have today confirmed that non-EU Alternative Investment Funds ("AIFs") (i.e. AIFs not established in the EU) will not be subject to Securities Financing Transaction Regulation ("SFTR") reporting obligations.

Both ESMA and the European Commission state that the scoping provision in Article 2 of the SFTR limits the application of the Regulation to non-EU counterparties. This endorses the view held by the industry prior to 6 January 2020, which ESMA appeared to reject in its final report on its SFTR reporting guidelines. ESMA has now clarified that:

“The reporting obligation under SFTR indeed applies only to “a counterparty to an SFT that is established: (i) in the Union, including all its branches irrespective of where they are located; (ii) in a third country, if the SFT is concluded in the course of the operations of a branch in the Union of that counterparty.”

AIFMs of non-EU AIFs who have been under the impression that they would need to report for those AIFs under SFTR from 11 October 2020 may therefore wind down their reporting preparations and breathe a sigh of relief, although the obligation remains if managing any other funds which are in scope, such as EU AIFs.

For More Information

ACA can provide guidance on the implementation of the SFTR reporting requirements, as well as regular, ongoing, data-driven assurance on the accuracy of your reports under SFTR and EMIR. For further information, contact Sam Reid on +44 (0)20 7042 0560.