ICMA and ISLA ask ESMA to delay SFTR until October

Impact of COVID-19 on SFTR implementation programmes

The run-up to the first reporting start date on 11 April has coincided with the acceleration in the proliferation and intensity of the COVID-19 pandemic. The impact on personnel involved in SFTR implementation programmes, compounded by pressures on firms caused by the associated surges in market volatility and volumes, has reached a point where firms believe that their capacity to ensure compliance with the requirements as of 11 April has been critically compromised. In addition, firms realise that this situation will deteriorate further for some months as countries around the world implement unprecedented measures to mitigate the COVID-19 pandemic. This includes legislative measures and constraints imposed by authorities, but also actions by individual firms to respond to the pandemic, protect their employees’ health, and ensure core business continuity in extremely stressed market conditions.

In light of such exceptional circumstances, we would like to ask ESMA to initiate, as a matter of urgency, the procedure for obtaining a formal delay of the SFTR reporting go-live date to an appropriate date that falls well outside the expected critical phase of the pandemic. We suggest that this could be 11 October 2020, the reporting start date for the third phase of SFTR reporting. In the absence of a formal delay, we would ask ESMA, at a minimum, to consider equivalent measures that would provide forbearance and sufficient reassurance for firms that they are not expected by ESMA and their respective NCA to ensure strict compliance with SFTR reporting obligations for an appropriate period of time following the legal reporting start date. Again, the October start date would seem to be a reasonable reference point.

The full letter is available at https://www.isla.co.uk/wp-content/uploads/2019/03/ICMA_ISLA_letter_to_ESMA_SFTR-and-COVID-19.pdf

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