Transaction Reporting - Securities Financing Transactions Regulation

Since the financial crisis in 2008 the regulatory requirements for financial institutions have been steadily increased in order to prevent renewed distortions in the markets and to identify them at an early stage. Supervisory authorities worldwide are raising reporting requirements for publicly traded and over-the-counter financial instrument transactions. Now that daily reporting has been implemented for a large number of financial instruments under EMIR and MiFIR. Securities Financing Transactions Regulation (SFTR) closes the remaining gap for monitoring securities financing transactions. Once SFTR has been finally ratified, almost all financial instrument transactions between two counterparties must be reported to an authorised trade repository or to the competent authorities within one day. Despite similarities to EMIR, reporting required market participants face major challenges, ranging from communication with counterparties to database management and comprehensive process adjustments.

The objective of SFTR is to facilitate transparency in the area of high-volume securities financing transactions in the financial sector.
 


The three pillars of transparency, disclosure and reporting form the basis for the supervisory authority ESMA to implement targeted and effective control measures to ensure financial stability, particularly in the shadow banking sector.

SFTR's bilateral reporting obligation concerns the following market participants:

  • Financial and non-financial counterparties based in the EU
  • Including all branches, regardless of their location
  • Counterparties in third countries, provided that their securities financing operation is conducted by any branches of those counterparties located in the EU.

The final report on the implementation of regulatory standards (RTS) was published by ESMA at the end of March 2017. ESMA and the EU Commission are currently in the final stages of consultations in order to achieve a timely publication in the European Official Journal. Based on the common decision-making process, we expect the delegated act to be published in Q1 2019. This will result in the following reporting dates for the various market participants:
 


 

Considering the large amount of data to be reported, in particular regarding the details on the re-use of securities, we recommend a prompt start to the planning and project phase.

We support you in the upcoming challenges. Our range of consulting services includes:

  • Technical conception and implementation of SFTR requirements
  • Analysis of the affected transactions, systems and business units
  • Preparation of GAP analyses for existing concepts and manuals
  • Usage of the SFTR Reference Guide
  • Technical project management
  • Support in operational activities
  • Development of optimized processes and efficient adaptation of existing processes
  • Support with the conception, organisation, monitoring and implementation of workshops and training courses
  • Organisation and coordination of project-relevant challenges as well as coordination with system and data owners
  • Complete documentation of the developed concepts

We understand the needs of financial institutions and, as an established partner, work closely with our clients to help them overcoming both current and future regulatory challenges.

Contact us today!

Our experts will work closely with you to develop an individualized and customized solution/ strategy for the implementation of SFTR at your financial/ credit institution.