SFTR Alert: Reporting Countdown

April 11, 2019

Triggered by last month’s publication in the Official Journal, today, 20 days following that publication, marks the day that the regulatory technical standards (RTS) relating to the new Securities Financing Transactions Regulation (SFTR) reporting regime take effect.

After much delay and anticipation, the countdown to the first SFTR report for relevant entities has therefore finally begun.

  • What: Modelled on the EMIR reporting obligation, “counterparties” to “SFT”s3 must report the details of any SFT they have concluded, as well as any modification or termination thereof, to a registered trade repository on a T+1 basis. 
  • Who: SFTR defines “counterparties” as being “FCs”4 and ”NFCs”5. Although SFTR broadly follows EMIR counterparty classifications, it does have some important distinctions: ManCos and AIFMs are responsible for reporting of their respective UCITS’ and AIFs’ SFTs6, and in certain limited cases FCs are responsible for reporting SFTs with certain small NFCs that satisfy prescribed criteria. 
  • Which trades: SFTs to be reported are determined by relevant go-live date (see “When” below) and for each counterparty type can be broken down into7:
    • all SFTs entered into on or after the relevant reporting date; and
    • SFTs entered into before the relevant date, that remain outstanding on that date and whose remaining maturity exceeds 180 days, or that have an open maturity and remain outstanding 180 days after the relevant go-live date (reports for these pre-existing SFTs must be made within 190 days of the relevant reporting date).
  • When: Time to comply depends on counterparty type: 
    • 12 months for credit institutions, investment firms and relevant third country firms, so 11 April 2020.
    • 15 months for CCPs and CSDs, so 11 July 2020.
    • 18 months for other FCs, so 11 October 2020.
    • 21 months for NFCs, so 11 January 2021.
  • What now: Identify SFT activity. Are you a relevant entity type?8 If you have SFTs – how will you comply and when must you comply by? Similarly to EMIR, the SFTR reporting obligation can be delegated.If you plan to report directly, do you have systems in place and have you identified a trade repository?

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