Majority of firms moving to consolidate regulatory reporting requirements under single platform
21 July 2021 UK
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A majority of SFTR survey respondents — banks, asset managers, hedge funds and brokers — are planning to consolidate their various regulatory reporting requirements under a single platform in the near future.
Following the go-live of the Securities Financing Transaction Regulation (SFTR) in July 2020, Pirum and IHS Markit’s SFTR Post-Implementation Industry Survey recorded over 70 per cent of respondents saying they are aiming to consolidate their various regulatory reporting requirements.
The benefits of outsourcing regulatory reporting to third parties, in terms of speed and convenience of roll out, as well as the upside of a collaborative approach to implementation and interpretation of new rules, were clear, the survey showed.
But for “firms that have already invested heavily in in-house technology to meet regulatory reporting needs, it may be a more difficult decision to abandon these in favour of a third party,” the survey says.
Other key considerations for firms were data harmonisation and improving overall data quality, where the survey indicates that “the market as a whole needs to commit in order to find a solution”.
It also finds that firms need to work on improving the quality and accuracy of their reporting, particularly on collateral data, to meet regulators’ ultimate objectives of increased transparency.
Importantly, the report said that while fines for SFTR non-compliance or inaccuracy have not been handed out to date, regulators still expect firms that are in scope to ensure they are reporting accurately and promptly.
UTI pairing was probably the major challenge going into SFTR, according to respondents. However, a year after SFTR went live, 80 per cent of firms say they have been able to achieve all or most of their pairing. By contrast, the survey says that only 28 per cent of respondents are satisfied with their UTI pairing for EMIR several years after implementation, which the report states is “a testament to the work done by the market”.
On a positive note, regulators have learnt lessons from previous regimes such as EMIR and MiFIR, and SFTR appears likely to be the model on which future regulatory reporting requirements are based, the report said.
Following the go-live of the Securities Financing Transaction Regulation (SFTR) in July 2020, Pirum and IHS Markit’s SFTR Post-Implementation Industry Survey recorded over 70 per cent of respondents saying they are aiming to consolidate their various regulatory reporting requirements.
The benefits of outsourcing regulatory reporting to third parties, in terms of speed and convenience of roll out, as well as the upside of a collaborative approach to implementation and interpretation of new rules, were clear, the survey showed.
But for “firms that have already invested heavily in in-house technology to meet regulatory reporting needs, it may be a more difficult decision to abandon these in favour of a third party,” the survey says.
Other key considerations for firms were data harmonisation and improving overall data quality, where the survey indicates that “the market as a whole needs to commit in order to find a solution”.
It also finds that firms need to work on improving the quality and accuracy of their reporting, particularly on collateral data, to meet regulators’ ultimate objectives of increased transparency.
Importantly, the report said that while fines for SFTR non-compliance or inaccuracy have not been handed out to date, regulators still expect firms that are in scope to ensure they are reporting accurately and promptly.
UTI pairing was probably the major challenge going into SFTR, according to respondents. However, a year after SFTR went live, 80 per cent of firms say they have been able to achieve all or most of their pairing. By contrast, the survey says that only 28 per cent of respondents are satisfied with their UTI pairing for EMIR several years after implementation, which the report states is “a testament to the work done by the market”.
On a positive note, regulators have learnt lessons from previous regimes such as EMIR and MiFIR, and SFTR appears likely to be the model on which future regulatory reporting requirements are based, the report said.
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