ABN AMRO, Banco Santander, Bank of America Merrill Lynch, Barclays, Goldman Sachs, ING and three other financial institutions have joined IHS Markit’s technology design team for Securities Financing Transaction Regulation (SFTR) reporting.
“With significant engagement from more than 40 industry leaders, we are confident that we are developing a comprehensive, universal SFTR reporting solution that will streamline compliance requirements for the full range of firms active in the securities lending, repo and prime brokerage markets,” says Pierre Khemdoudi (pictured), managing director and global co-head of equities, data and analytics at IHS Markit.
SFTR was enacted by the European Parliament in 2015 to provide greater transparency on cross-asset class lending, borrowing, repurchase agreements and sell/buy-back agreements among counterparties in the EU. Firms subject to the regulation will have to report 155 data fields, including a unique transaction identifier (UTI), a legal entity identifier (LEI) and a master agreement for each trade, on a daily basis. Transaction reporting requirements under Article 4 are expected to begin in Q1 2020.
Since 2017, leading financial institutions and other partners have been working with IHS Markit and Pirum Systems to develop the IHS Markit SFTR reporting solution. The solution will streamline trade reporting to repositories for repo and reverse repo agreements, securities loans and borrows, commodities loans and borrows, prime brokerage margin lending and collateral re-use.
To ensure interoperability within the industry ecosystem, IHS Markit is also engaging vendors, trade repositories and agents with approved publication arrangements (APAs) on the design of its SFTR reporting solution.
SFTR will be phased in through 2020, and additional reconciliation requirements are under consideration for a later date.
