Reporting under the EU’s SFT Regulation (SFTR) has started. Banks and investment firms, as well as CCPs and CSDs have an obligation to report all SFTs executed from today to authorised trade repositories, who in turn will validate and reconcile the reports and pass the data on to regulators. Reporting by banks and investment firms was due to go live on 13 April, but this was postponed by ESMA in March in response to the global COVID-19 pandemic. As a result, phases 1 and 2 of the SFTR reporting regime both went live today.
Today’s go-live is the culmination of several years of intensive cross-industry discussions and preparations. ICMA has been driving this collaborative effort through its SFTR Task Force which brings together around 650 individuals representing more than 150 firms across the whole market spectrum, including sell-side and buy-side participants, but also market infrastructures, trade repositories and other service providers. Based on extensive input from Task Force members, ICMA has put together detailed best practice recommendations for the industry which complement and supplement the regulatory framework and aim to ensure consistency in firms’ implementation efforts. The ICMA recommendations for reporting under SFTR were initially published in February 2020 and continue to evolve. A third version of the document was issued on 30 June, ahead of today’s go-live, but this is not the end of the journey. The implementation of the highly complex SFTR reporting regime will be an iterative process as not all aspects of SFTR have been finalised and the quality and consistency of the reported data is expected to gradually improve over time. Discussions in the SFTR Task Force will continue as firms learn the lessons from the first weeks of reporting. The ICMA recommendations will be updated to reflect those discussions, but of course also to incorporate any additional guidance expected from ESMA, e.g. in the form of Q&As. The open and constructive dialogue with regulators, including ESMA and the NCAs, has been at the core of the implementation work from the start and will continue to be central.
ICMA would like to congratulate all market participants and service-providers involved in this unique cross-industry effort and is looking forward to further supporting its members on the path to a more transparent, resilient and efficient repo market.