Deal or no deal, we will see regulatory divergence after Brexit, says panellists
04 November 2020 London
Image: Rawf8 / Adobestock.com
Irrespective of a deal or no deal, we are likely to see divergence after Brexit, explains panellist at the SLT Securities Finance Technology Symposium.
Nick Larrieu, head of sales at DTCC for Europe, the Middle East and Africa, explains: “We have already seen divergence with the non-financial counterparts (NFCs) being no longer required to report under the Securities Financing Transactions Regulation, which gives us a fairly good indication of the Financial Conduct Authority’s (FCA) position on who they expect to take on the burden of trade reporting and the relative importance of the NFCs when it comes to systemic risk.”
The final fourth phase of SFTR, set for 11 January, will see NFCs begin reporting SFTs in the EU, while the UK national regulator has scrapped the requirement as it falls outside the Brexit transition period that ends on 31 December.
A further parting of ways is expected as new aspects of the European Markets Infrastructure Regulation Refit and the Central Securities Depositories Regulation come into effect.
Both Catherine Talks, product manager at UnaVista, and Larrieu agreed on the panel that trade repository (TR) reconciliation won’t occur between UK reported trades in the EU27 as they are separate regulations, however, Larrieu explains: “There will be similarities when it comes to updates for SFTR next year where both regulators will take a practical alignment in terms of rules in schema changes.”
Nick Larrieu, head of sales at DTCC for Europe, the Middle East and Africa, explains: “We have already seen divergence with the non-financial counterparts (NFCs) being no longer required to report under the Securities Financing Transactions Regulation, which gives us a fairly good indication of the Financial Conduct Authority’s (FCA) position on who they expect to take on the burden of trade reporting and the relative importance of the NFCs when it comes to systemic risk.”
The final fourth phase of SFTR, set for 11 January, will see NFCs begin reporting SFTs in the EU, while the UK national regulator has scrapped the requirement as it falls outside the Brexit transition period that ends on 31 December.
A further parting of ways is expected as new aspects of the European Markets Infrastructure Regulation Refit and the Central Securities Depositories Regulation come into effect.
Both Catherine Talks, product manager at UnaVista, and Larrieu agreed on the panel that trade repository (TR) reconciliation won’t occur between UK reported trades in the EU27 as they are separate regulations, however, Larrieu explains: “There will be similarities when it comes to updates for SFTR next year where both regulators will take a practical alignment in terms of rules in schema changes.”
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