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March 23, 2020

SFTR and Tick-Size Regime Delayed By Three Months, Call Taping Temporarily Relaxed

Recognising the upheaval caused by COVID-19 on financial markets, ESMA has made a number of announcements –

 

SFTR – It has postponed, by three months, the reporting obligations related to securities financing transactions under the Securities Financing Transactions Regulation and under Markets in Financial Instruments Regulation.

In a written statement, ESMA said, “ESMA therefore expects competent authorities not to prioritise their supervisory actions towards counterparties, entities responsible for reporting and investment firms in respect of SFT reporting obligations, under SFTR and under MIFIR, as of 13 April 2020 and until 13 July 2020, including regarding to SFTs concluded in that period of time, and to generally apply their risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.”

 

Tick-Size Regime – ESMA now expects competent authorities not to prioritise their supervisory actions in relation to the new tick-size regime from the application date, 26 March, until 26 June 2020. It also stated that authorities should apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.

 

Call Taping – ESMA also clarified its position on recording calls, as people increasingly work from home or other contingency sites.

It recognises that some firms are unable to record voice communications, and so ESMA expects them to consider what alternative steps they could take to mitigate the risks related to the lack of recording. Firms are expected to deploy “all possible efforts” to ensure that these measures are temporary and that recording of conversations is restored as soon as possible.

 

 


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