PwC’s common UTI template endorsed by ICMA
13 May 2020 Frankfurt
Image: NaiyanaB/Shutterstock.com
PwC is tackling one of the last major challenges posed by the Securities Financing Transactions Regulation (SFTR) by creating a common template for structuring the mandatory unique transaction identifier (UTI) feature.
The template is aimed at reducing the burden felt by all banks, but most acutely by smaller firms, in negotiating the terms of exchanging UTIs for bilaterally trades with all their counterparts ahead of the reporting go-live on 13 July.
To address this, PwC, in conjunction with an industry working group, has collaborated with the International Capital Market Association (ICMA) to compile a universally-accepted data format for bilateral UTI exchange.
The UTI template was developed by Roland Scheinert, partner and capital markets advisory leader at PwC Germany, who noted last year that an increasing number of firms, mostly smaller and mid-sized banks, were reaching out to their counterparties with bespoke templates for UTI exchange.
At the same time, larger banks were flagging that the process of agreeing on the exact data format for bilateral UTI exchange and building the interfaces to automatically parse this data for each relevant counterparty would require a lot of effort.
In response, Scheinert approached Alex Westphal, who heads up ICMA’s SFTR taskforce, in November 2019 and from that meeting a group of ICMA members were formed into a sub-group to address the need for a common template.
The recommendation of this group was to use the fields defined by ICMA and the International Securities Lending Association in their minimum list of 31 fields for bilateral UTI exchange.
As part of its draft recommendations for SFTR reporting, ICMA’s European Repo and Collateral Council has now endorsed the resulting UTI XML schema and is encouraging industry stakeholders adopt this format for bilateral trades as opposed to constructing and negotiating their own bespoke UTI templates. For firms unable to utilise XML, the template is also available as a CSV file.
Since February, ICMA has opened up its SFTR-related resources to the entire securities finance market and not just its members, meaning both XML and CSV versions of the UTI are free to download via the ICMA website.
Access to the association’s SFTR literature and reporting guides will be particularly useful for smaller entities which may not be a member of ICMA but are simultaneously those most likely to need its guidance, especially for bilateral UTI exchanges.
According to market participants, since ICMA included the UTI template in its SFTR reporting recommendations (published 22 April), several banks have already incorporated the templates in their client outreach. They have reported that it has so far been widely accepted by many of their counterparties.
The template is aimed at reducing the burden felt by all banks, but most acutely by smaller firms, in negotiating the terms of exchanging UTIs for bilaterally trades with all their counterparts ahead of the reporting go-live on 13 July.
To address this, PwC, in conjunction with an industry working group, has collaborated with the International Capital Market Association (ICMA) to compile a universally-accepted data format for bilateral UTI exchange.
The UTI template was developed by Roland Scheinert, partner and capital markets advisory leader at PwC Germany, who noted last year that an increasing number of firms, mostly smaller and mid-sized banks, were reaching out to their counterparties with bespoke templates for UTI exchange.
At the same time, larger banks were flagging that the process of agreeing on the exact data format for bilateral UTI exchange and building the interfaces to automatically parse this data for each relevant counterparty would require a lot of effort.
In response, Scheinert approached Alex Westphal, who heads up ICMA’s SFTR taskforce, in November 2019 and from that meeting a group of ICMA members were formed into a sub-group to address the need for a common template.
The recommendation of this group was to use the fields defined by ICMA and the International Securities Lending Association in their minimum list of 31 fields for bilateral UTI exchange.
As part of its draft recommendations for SFTR reporting, ICMA’s European Repo and Collateral Council has now endorsed the resulting UTI XML schema and is encouraging industry stakeholders adopt this format for bilateral trades as opposed to constructing and negotiating their own bespoke UTI templates. For firms unable to utilise XML, the template is also available as a CSV file.
Since February, ICMA has opened up its SFTR-related resources to the entire securities finance market and not just its members, meaning both XML and CSV versions of the UTI are free to download via the ICMA website.
Access to the association’s SFTR literature and reporting guides will be particularly useful for smaller entities which may not be a member of ICMA but are simultaneously those most likely to need its guidance, especially for bilateral UTI exchanges.
According to market participants, since ICMA included the UTI template in its SFTR reporting recommendations (published 22 April), several banks have already incorporated the templates in their client outreach. They have reported that it has so far been widely accepted by many of their counterparties.
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