ISLA logo

Non-EU Trust Bank Reporting

Non-EU Trust Bank Reporting


Status: Best Practice Finalised, Last Updated: 26/04/2021

When transacting with a non-EU trust bank, where beneficiaries of the underlying securities in SFTs are non-EU, is the obligation to provide the beneficiary's LEI or principal's LEI or is reporting required at all?

Best Practice:
Example scenario: "Within our securities lending program, one of our principal lenders is a trust bank with numerous beneficiary customers, including trusts and pension plans. When we enter into a SFTs with our borrowers for this trust bank, it is always in an agent capacity (as a non-EU agent lender) with the trust bank as principal. The underlying securities in the SFT are not beneficially owned by the trust bank, but rather by one or more of its beneficiaries. Those trust and pension plan customers are our global custody customers and they disclose their name and LEI in certain countries to comply with local regulations and tax rule."

Out-of-scope or third-party entities who trade with an in-scope entity have a responsibility to share certain information with their counterpart, if their counterparts are to remain compliant with ESMA for the reporting of SFTR.

That responsibility will be almost identical to the ALD process with 2 key differences:

  • Counterparties must be identified by LEI to report in Field 1.11 (Other Counterparty) and Field 1.13 (Beneficiary).

  • The shared information will need to be provided T+1 or sooner for loans and S+1 for collateral.

In this scenario the beneficial owners of the trust bank do not have to register or provide LEIs/or data to the Trust Bank, as they are out-of-scope participants. The Trust Bank does have to register and provide LEIs to the non-EU entity because, even though they too are out-of-scope, the end-borrower has a reporting obligation to reference this counterparty and therefore needs this mandatory information to remain compliant. (SFTR-196)


Creating your PDF, please wait.

PDF created successfully.

Sorry, your PDF could not be created at this time.


Already a member? Login to your account

Interested in becoming a member?

ISLA’s members span the breadth and depth of the securities lending industry, and there are many benefits of joining the Association’s network.

Become a member today