Highlights:
-> July appears to be a compromise, earlier than the 11 October 2020 date asked for by ISLA and ICMA.
-> ESMA won’t register Trade Repositories ahead of the 13 April 2020 date.
-> Looking to the 13 July 2020 date for all parties to be ready.
ESMA therefore expects competent authorities not to prioritise their supervisory actions towards counterparties, entities responsible for reporting and investment firms in respect of SFT reporting obligations, under SFTR and under MIFIR, as of 13 April 2020 and until 13 July 2020, including regarding to SFTs concluded in that period of time, and to generally apply their risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.
Further, ESMA does not consider it necessary to register any TR ahead of 13 April 2020. This will give TRs more time to cope with the emergency and be ready to support the new reporting regime at a later point in time. ESMA is also not available to record the details of SFTs. As a result, counterparties, entities responsible for reporting and report submitting entities will be unable to report by the reporting start date.
ESMA expects TRs to be registered sufficiently ahead of the next phase of the reporting regime, i.e. 13 July 2020, for credit institutions, investment firms, CCPs and CSDs and relevant third-country entities to start reporting as of this date.
The full statement is available at https://www.esma.europa.eu/sites/default/files/library/esma80-191-995_public_statement.pdf
Industry commentary on the delay:
Pirum/IHS Markit: “Given the combined challenge of managing COVID-19 workplace arrangements and volatile global markets, it is our view that this delay will allow all market participants more time to effectively test and prepare for SFTR reporting. Nevertheless, we remain committed to delivering a production-ready SFTR reporting solution by the end of March 2020 and our comprehensive support is available throughout the transitional period to Phase 1.”
MarketAxess: “It appears ESMA won’t look at any reporting till July 2020 but it’s not clear whether reporting should be delayed or carry on for phase 1 go live firms from April 2020, the original start date. At MarketAxess we will continue with our implementation of SFTR for our clients as if reporting is still required on SFTs from April 2020 for those firms impacted till further clarification is sought.”