SFTR Shorts, Part 2

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This article is the second part of the ‘SFTR Shorts’, a series of bite-sized discussions around various aspects of the Securities Financing Transaction Regulation (SFTR). Alan McIntyre, Senior BA and Industry Relations Lead at Regtek.Solutions drills into various aspects of the reporting requirements under SFTR and identifies some of the challenges that firms will need to consider. Register here to hear more during our webinar on SFTR on the 13th of March. 

While the discussion paper¹ had set out the aim to follow the EMIR model of Counterparty Data and Common Data the final report on the RTS² arrived upon 4 tables:

Table 1 – Counterparty Data

Table 2 – Loan and Collateral Data

Table 3 – Margin Data

Table 4 – Re-use, Cash Reinvestment and Funding Sources Data

While these four tables look daunting at first glance, it’s simpler to visualise them as the three submission messages that arise from them:

The 18 Counterparty Date fields and 99 Loan and Collateral Data fields are submitted as one message and can be thought of as the ‘trade message’ that describes the SFT transaction being reported.

The 20 Margin Data fields are a supplementary message that includes details of the Initial, Variation and Excess margin both posted and received. This is very much like the Collateral reports in EMIR.

And finally, the 16 fields in the snappily titled Re-use, Cash Reinvestment and Funding Sources Data fields are an additional supplementary message that provide details including ‘estimated reuse’, ‘reinvested cash’ and ‘market value of the funding sources. Sticking with the EMIR comparison this is like the Valuation message in EMIR but serving a slightly different purpose.

So while I don’t want to underestimate the challenges presented in collating, validating and reporting the 156 fields included in these 4 tables, I do personally feel it’s far simpler to visualize them as the three message types that arise:

Alan McIntyre

Senior BA and Industry Relations Lead at RegTek.Solutions

 

Download the PDF version of this article.

Please join the discussion with Alan on the LinkedIn group: SFTR Transaction Reporting group 

Missed last week’s SFTR Short? Read it here.

  1. https://www.esma.europa.eu/sites/default/files/library/2016-356.pdf
  2. https://www.esma.europa.eu/sites/default/files/library/esma70-708036281-82_2017_sftr_final_report_and_cba.pdf

The post SFTR Shorts, Part 2 appeared first on RTS.

Register here.

SFTR will creep up on firms by 2019, join us to get ahead of the game and hear perspectives from every angle. We have Paul Bradford, Head of Stock Loan and Repo trading at ING who will provide views on the effect of SFTR on the trading desk. Fabian Klar from REGIS-TR will explain their plans, and compare SFTR to other reporting regulations. Simon Davies will paint a picture of what an SFTR compliance plan should look like, and how long you need to be ready. Mark Steadman will update us on the Deriv/SERV plans and how SFTR will impact other streams of reporting. Alan McIntyre will contrast implementing SFTR with previous projects, and explain where re-use of previous infrastructure can be made. Other areas for discussion include changes to business processes, reconciliation requirements, data volumes, data formats, delegated reporting, the quality of the actual regulatory text, and your counterparties involvement.

Speakers

  • Paul Bradford: Head of Stock Loan and Repo Trading at ING
  • Fabian Klar, VP Business Development at REGIS-TR
  • Simon Davies, Senior Consultant at The Field Effect
  • Mark Steadman, European Head of Product Development, DTCC Deriv/SERV
  • Alan McIntyre, Senior Business Analyst, RegTek.Solutions

Topics:

  • How does SFTR affect a trading desk?
  • Will SFTR change trading behaviour?
  • What are the plans at REGIS to support SFTR?
  • How does SFTR compare with OTC reporting?
  • What is being said in the market about preparing for SFTR?
  • What would a typical SFTR project look like? (content and timing)
  • Tell us about the data requirements for SFTR?
  • What are the plans at DTCC to prepare for SFTR?
  • How will SFTR change business processes?
  • What are the reconciliation requirements for SFTR?
  • How can firms re-use their previous reporting platforms for SFTR?
  • How well are the regulations from ESMA written?
  • Does the volume of data for SFTR bring new challenges?
  • How would delegated reporting work for SFTR?
  • Does SFTR require cooperation from your counterparties?

Register here.

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