IMN: SFTR will drive the market for the rest of the year
12 September 2018 London
Image: Shutterstock
The Securities Finance Transaction Regulation (SFTR) is going to drive the market for the rest of 2018, according to a panellist at this year’s annual European Securities Finance and Collateral Management Conference.
During the panel, speakers agreed that providing data and delivering data for counterparties will drive where business goes, and as a reporting obligation, while SFTR isn’t meant to change market practices, it will.
One panellist warned: “If you’re not at a point where you can transmit and reconcile the data [for SFTR], you will not be a participant in the market.”
One panellist said: “Borrowers will be very dependent on the lenders for that data. If they can’t get the data in the right format they will have to move business. The regulation is very complicated. SFTR is definitely going to drive business.”
Another panellist affirmed: “We have our best people on the industry working on this. We will resolve it as a regulatory issue. Clients should not be impacted by it. Like every other piece of regulation, we have to deal with it and get through it. We’re already putting our best people on it, and generally, the data vendors are participating. They are doing a good job on that, but it is our job to fix it.”
Regulation was a hot topic during the session, and alongside SFTR were the challenges brought by the Central Securities Depositories Regulation in terms of the level of fines and penalties participants could face under it. Also discussed was the impact of Brexit and what it could mean for the securities lending market.
Of Brexit, one panellist said: “I don’t think Brexit is an opportunity, it’s a disappointing outcome. It’s a distraction and a disruption, something that you have to commit resources towards.”
Another panellist, giving a US perspective, said: “I think when we talk about regulation and Brexit, it’s all about resource distraction and documentation distraction. That’s always a challenge. But as with all regulatory issues, the industry has ways to get through them.”
During the panel, speakers agreed that providing data and delivering data for counterparties will drive where business goes, and as a reporting obligation, while SFTR isn’t meant to change market practices, it will.
One panellist warned: “If you’re not at a point where you can transmit and reconcile the data [for SFTR], you will not be a participant in the market.”
One panellist said: “Borrowers will be very dependent on the lenders for that data. If they can’t get the data in the right format they will have to move business. The regulation is very complicated. SFTR is definitely going to drive business.”
Another panellist affirmed: “We have our best people on the industry working on this. We will resolve it as a regulatory issue. Clients should not be impacted by it. Like every other piece of regulation, we have to deal with it and get through it. We’re already putting our best people on it, and generally, the data vendors are participating. They are doing a good job on that, but it is our job to fix it.”
Regulation was a hot topic during the session, and alongside SFTR were the challenges brought by the Central Securities Depositories Regulation in terms of the level of fines and penalties participants could face under it. Also discussed was the impact of Brexit and what it could mean for the securities lending market.
Of Brexit, one panellist said: “I don’t think Brexit is an opportunity, it’s a disappointing outcome. It’s a distraction and a disruption, something that you have to commit resources towards.”
Another panellist, giving a US perspective, said: “I think when we talk about regulation and Brexit, it’s all about resource distraction and documentation distraction. That’s always a challenge. But as with all regulatory issues, the industry has ways to get through them.”
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