Securities Financing Transactions
a.k.a. SFTs
Deals where securities are used to borrow cash, or cash is used to borrow securities, such as repos and securities lending.
Securities financing transactions (SFTs) are a family of deals where securities and cash swap hands temporarily. The main types are repos (selling bonds with a promise to buy them back), securities lending (lending shares or bonds, often to short sellers, for a fee), and margin lending.
They are the back-room machinery of modern markets. After 2008, regulators in Europe introduced reporting rules for SFTs so they could see how much hidden leverage was being built up through them.
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