SFTR reporting starts strong 03 August 2020London Reporter: Drew Nicol
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Almost all reported transactions were accepted by trade repositories (TR) in the first weeks of reporting under the Securities Financing Transactions Regulation (SFTR), according to the International Securities Lending Association’s (ISLA) regulatory chief.
Adrian Dale, head of regulation and market practice for the trade body, notes that 95 percent of transactions are being accepted by TRs, which he says is “a testament to the extraordinary industry preparations”.
Since 13 July credit institutions, investment firms, central counterparties and central securities depositories have been reporting SFTs.
ISLA estimates that securities lending trades alone accounted for some 1 million of all transactions reported in the first week.
“These are however only the first days of reporting, and so not unexpectedly tweaks will need to be made,” says Dale. “For example, some firms data outputs will require refining, whilst others are ironing out reconciliation breaks caused by different treatments of life cycle events, also referred to as ‘event choreography’.”
As the later phases of SFTR, which bring in the buy side and non-financial counterparts, will establish two “notable trends”, according to Dale.
“The first being that issues and challenges will diminish as they are resolved, whilst the second will be that data volumes will increase as old trades mature and are replaced with new loans captured by the scope of the regulation,” he explains.
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