RMA publishes new SFTR reporting contract template
16 January 2020 Philadelphia
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The Risk Management Association has released a new standard legal agreement to address the mandatory reporting obligations of the EU’s Securities Financing Transactions Regulation (SFTR), which is set to come into force on 11 April.
The SFTR Reporting Delegation Agreement (RDA) focuses on article four and deals with the regulation’s transaction reporting and recordkeeping requirements.
The new agreement was devised by the RMA’s securities lending council, which is chaired by State Street’s Glenn Horner and is otherwise made up of a cross-section of industry participants from the buy and sell side.
According to the RMA, the RDA provides market participants with a “comprehensive and easy-to-use template” to assist in memorialising reporting services provided by agent lenders to beneficial owners.
The association says the framework aims to streamline the implementation of SFTR and promote consistency across the securities lending market.
The RMA's reporting framework comes shortly after the International Securities Lending Association (ISLA) partnered with four other associations to also create an agreement framework.
The Master Regulatory Reporting Agreement is based on the International Swaps and Derivatives Association’s similar agreement template for reporting under the European Market Infrastructure Regulation and was designed to remain effective once the UK leaves the EU on 31 January.
The first phase of SFTR’s go-live will include investment firms and credit institutions, before expanding to bring in central counterparties and central securities depositories in July with phase two, and then incorporating the buy side in October.
The final report for SFTR was released by the European Securities and Markets Authority (ESMA) earlier this month.
Key changes from the level two guidelines included a 12-month grace period on the reporting requirement for legal entity identifiers from third-country issues.
Elsewhere, ESMA confirmed that non-EU alternative investment funds are now in-scope if their managers are within the EU. This addition surprised many industry participants and flies in the face of the feedback the EU watchdog had received on the matter.
Those funds must now scrabble to secure a reporting mechanism by October or risk being cut off from the EU lending market.
The SFTR Reporting Delegation Agreement (RDA) focuses on article four and deals with the regulation’s transaction reporting and recordkeeping requirements.
The new agreement was devised by the RMA’s securities lending council, which is chaired by State Street’s Glenn Horner and is otherwise made up of a cross-section of industry participants from the buy and sell side.
According to the RMA, the RDA provides market participants with a “comprehensive and easy-to-use template” to assist in memorialising reporting services provided by agent lenders to beneficial owners.
The association says the framework aims to streamline the implementation of SFTR and promote consistency across the securities lending market.
The RMA's reporting framework comes shortly after the International Securities Lending Association (ISLA) partnered with four other associations to also create an agreement framework.
The Master Regulatory Reporting Agreement is based on the International Swaps and Derivatives Association’s similar agreement template for reporting under the European Market Infrastructure Regulation and was designed to remain effective once the UK leaves the EU on 31 January.
The first phase of SFTR’s go-live will include investment firms and credit institutions, before expanding to bring in central counterparties and central securities depositories in July with phase two, and then incorporating the buy side in October.
The final report for SFTR was released by the European Securities and Markets Authority (ESMA) earlier this month.
Key changes from the level two guidelines included a 12-month grace period on the reporting requirement for legal entity identifiers from third-country issues.
Elsewhere, ESMA confirmed that non-EU alternative investment funds are now in-scope if their managers are within the EU. This addition surprised many industry participants and flies in the face of the feedback the EU watchdog had received on the matter.
Those funds must now scrabble to secure a reporting mechanism by October or risk being cut off from the EU lending market.
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