On November 13, 2014, the Financial Stability Board (“FSB”) proposed “standards and processes for global securities financing data collection and aggregation.”  This is a follow-up from the August 2013 report on “Policy Framework for Addressing Shadow Banking Risks and Repos” which, among other recommendations, set out final recommendations to improve data collection to detect financial stability risks in the repo and securities lending markets. The proposal sets forth a two tier data collection and aggregation system whereby market participants would report data to their national regulators and then the national regulators would report, on a monthly basis, aggregated data to the FSB.  The FSB would then aggregate the data from the various national regulators and make it available for financial stability monitoring purposes and potentially to the public.

Proposed Data Elements

The following are the proposed data elements for repo transactions:

  • Reporting Period:  The month of the settled transactions
  • Number of Trades settled during the reporting period
  • Original Maturity
  • Currency
  • Principal Amount
  • Type of Contract
  • Type of reporting entity/counterparty
  • Traded on a Principal or Agency Basis
  • Cleared vs. not cleared
  • Counterparty jurisdiction
  • Residual Maturity
  • Repo Rate
  • Type of repo settlement- tri-party v. bilateral
  • Collateral type
  • Collateral quality
  • Collateral maturity
  • Haircuts
  • Collateral market value in USD
  • Re-use of collateral-Value of collateral that has been reused.

The proposal also sets forth required data elements for securities lending transactions and margin lending transactions.

Other highlights

Additional topics addressed in the proposal include:

  • Legal issues surrounding the collection and use of data with a particular focus on confidentiality issues;
  • Potential measures to remove the double counting of data;
  • Minimum standards for national regulators to impose on market participants in order to be able to report data to the FSB;
  • Potential collection and reporting methods for national regulators to implement.

Comments on the proposal are due by February 12, 2015.  The FSB indicated it would like to finalize the rule by the end of 2015 and indicated it may propose additional data elements to address the following: 1. transactions that are economically equivalent to repos, securities lending transactions or margin transactions; 2. data needed to calculate collateral velocity, and; 3.  data regarding minimum haircuts.

The proposal can be found here.  

Good data? Good day.  DR2