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The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Banks, Investment Firms Brace for April 14 SFTR Implementation Date

With the first implementation date looming for the EU’s Securities Finance Transaction Regulation (SFTR), banks and investment firms impacted by the April 14 live date are finalizing their preparations for this data-heavy reporting regulation

To aid in those efforts – and to facilitate industry discussion around best approaches to the regulation – A-Team Group is hosting a webinar on SFTR on March 5. The webinar will feature a panel of experts discussing how regulated entities are approaching SFTR’s systems and data requirements. Panelists for the free event include:

  • Dawd Haque, Global lead for Regulatory Market Initiatives, Transformation & Strategy, Deutsche Bank AG
  • Thomas Pikett, Vice President, Agencies Securities Lending, Product Development, JP Morgan
  • Lance Risi, Director – Product Management, S&P Global Market Intelligence
  • Linda Coffman, EVP Reference Data Utility, SmartStream RDU

Registration is free. You can get more information here.

The regulation will come into force in four phases. The initial April 14 reporting go-live date for banks and investment firms is followed by July 13 (for CCPs and CSDs), October 12 (for insurance firms, UCITs, AIFs and pension funds) and January 11, 2021 (for non-financial entities).

In the meantime, it’s worth revisiting what SFTR is all about, and what firms need to do to address the challenges it poses. The regulation is extensive, with some 150 data fields in its mandatory regulatory reports, introducing the kind of transaction reporting practitioners may have experienced via the MiFIR and EMIR regulations.

SFTR aims to highlight transactions that could pose a significant level of systemic risk. It sets out requirements to improve market transparency of securities financing transactions (SFTs). Any firm engaging in SFTs will have to review their workflows and upgrade data management systems to fulfil the transaction reporting obligation.

To improve transparency, SFTR requires all SFTs and associated collateral to be reported to recognized trade repositories, using the ISO 20022 standard, building on the MiFIR requirements. SFTR reporting requires firms to populate a dozen or so fields covering the details of the financial instrument traded, including an SFTR specific classification and a security quality indicator. Gathering this information, identifying and closing any gaps in coverage, and finally enriching it so it meets the quality criteria of the regulation, represent a thorny challenge, not least because how to meet the requirements for certain data fields is only now becoming clear.

All of these issues and more will be discussed on the webinar on March 5. In the meantime, you can get more information about the challenges and best practice response from A-Team’s white paper on the topic, written with SmartStream and available for free download here.

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