December 8, 2017

SFTR: Navigating the Challenge: Whitepaper Number 2 from TFE, Equilend and Trax is the second in a series of whitepapers where The Field Effect reviews the impacts of the Securities Finance Transaction Regulation (SFTR). This second 24 page white-paper covers in detail the Regulatory overview and business impacts, Changing your operating model and Next steps.

This is the second in a series of whitepapers where The Field Effect reviews the impacts of the Securities Finance Transaction Regulation (SFTR).

The European Commission has declared to the European Parliament that SFTR is expected to be live as of 2019. If you trade repo or buy/sell-backs, if you lend or borrow equities, or as a prime broker lend margin to hedge funds, you must be ready to report. So, you must design, build and test your SFTR solution in 2018, ready for implementation and on-boarding in 2019.

This paper provides an overview of the regulation: who reports, what products are covered, which reports must be submitted by when, the 153 data attribute requirements, and what will be matched and reconciled. We examine the impact of SFTR requirements on the business operating model through 7 key dimensions: value, business process, controls, functionality, people, technology and data. We look at solution options and identify what work needs to be done in 2018 on the roadmap to compliance, and we suggest specific next steps that firms should consider.

SFTR is a sweeping, mandatory change for the securities financing industry that will consume significant 2018 budget. However, it doesn’t have to be just about cost — there is value that can be extracted on the journey to regulatory compliance. Some  firms will use SFTR budget to establish high quality data repositories of business intelligence to enhance decision making. Others will seize the opportunity to improve process effciency and reduce manual touch points. Some will exploit the regulatory budget to enhance the business operating model to better support pledge structures, tri-party and clearing, reducing balance sheet costs.

In summary, the next few months are all about vision, solution design, roadmap, budget and business case (if you don’t already have them). Given the regulatory timeline, firms really must mobilise their SFTR initiative early in 2018 if they are to have a decent chance of meeting the deadline. Time is short.

This paper is supported by EquiLend and Trax, leading trading and post-trade service providers for the securities  nance and repo markets including support for matching, reconciliation and regulatory reporting. Whilst both firms have SFTR service offerings, the paper is vendor independent and solution-agnostic.

Click the image below to visit the download page at the TFE website (or click here:


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