New SFTR reporting obligations
22 March 2019 saw acts implementing the Regulation (EU) 2015/2365 on transparency of securities financing transactions and of reuse (SFTR) published in the Official Journal of the European Union. These included the Commission Delegated Regulation (EU) 2019/363 supplementing Regulation 2015/2365 with regard to regulatory technical standards specifying the details of securities financing transactions (SFTs) to be reported to trade repositories.
Regulation 2019/363 came into force on 11 April 2019. The obligation to report securities financing transactions for financial operators becomes binding a year later, i.e. on 13 April 2020.
Under SFTR, the reporting obligation applies not only to banks, but also to other financial undertakings (investment companies, investment funds, pension funds, and insurance companies), and non-financial institutions that execute transactions involving the securities and commodities specified in the Regulation. Both parties to the transaction have to comply with it.
With the SFTR in force, the following SFTs are subject to the obligation, as specified in the Regulation: repurchase transactions (repos), securities or commodities lending transactions, buy-sell back and sell-buy back transactions, and margin lending transactions.
Key challenges for banks
The adoption of the Regulation saw the banks having to:
1. adequately identify and obtain details from front- and back-office systems (a total of 155 fields) related to the SFTs executed and to related events.
2. adequately identify and obtain details from front- and back-office systems (a total of 155 fields) related to the SFTs executed and to related events.
3. adequately identify and obtain details from front- and back-office systems (a total of 155 fields) related to the SFTs executed and to related events.
How can we assist you?
Deloitte offers a wide range of advisory and support services on SFTR reporting implementation, in particular with respect to:
• reviewing data collected by the bank in processes related to financing transactions with securities, so as to analyse potential gaps;
• drafting functional SFT reporting specifications, building the data model, and preparing glossaries;
• verifying or assisting in the mapping of SFTs with data obtained from the bank’s front/back office and other sources;
• testing the target solution in line with KDPW_TR requirements;
• verifying the implementation and assessing SFTR reporting compliance;
• achieving optimum compliance with the applicable regulations by tailoring the solutions to the financial institution’s business profile and best market practices.