IHS Markit releases SFTR solution
09 December 2016 London
Image: Shutterstock
IHS Markit has officially entered the Securities Finance Transaction Regulation (SFTR) fray, with a solution aimed at alleviating the reporting requirements.
The fully hosted data and reporting solution provides the foundation needed to reconcile trading activity down to the unique trade and legal entity identifier (UTI and LEI) level of granularity. It also offers turnkey connectivity to trade repositories.
Features include a trade warehouse that pulls data from multiple sources and provides a standardised copy of all trading and collateral activity. A real-time module reconciles trades and creates the SFTR mandated-UTIs at the LEI level, with a full audit trail of the process including matching status reports.
IHS Markit’s solution is the latest in a line being rolled out to deal with the SFTR reporting requirements.
According to post-trade provider Pirum, SFTR reporting will be on a T+1 basis in line with existing regulatory reporting regimes.
It mandates two-sided reporting, with both collateral giver and taker required to report their side of the trade to a registered repository.
As part of the two-sided reporting obligation, a UTI must be included in their reports. “This value will be used by the trade repositories to match separately received reports from each counterpart to [a trade],” Pirum explained.
Pirum is leveraging its existing contract compare functionality to generate the UTIs needed for transaction reporting.
It promises that generating UTIs from positions matched in Pirum will ensure that trades submitted to repositories will have a higher matching rate once reconciled, reducing the amount of incorrect reports that counterparts need to review.
EquiLend recently revealed that it too is working on a solution to meet the reporting requirements for trades and collateral under SFTR.
The trading and post-trade service provider already captures much of the information required by SFTR, meaning it can create the UTI immediately either at the point of trade or during the post-trade comparison process.
The European Securities Markets Authority (ESMA) issued the level two consultation on SFTR in September, appearing to give market participants some hope that its requirements would be dialled back.
ESMA appeared to pull back on the requirement to report on collateral used as part of a trade on a T+1 basis, as well as admit that there were still some clashes with the European Market Infrastructure Regulation.
The feedback from this second stage will be used to finalise the draft technical standards, which will be submitted to the European Commission by the end of Q1 2017. The final version of SFTR will then come into force from 2018.
The fully hosted data and reporting solution provides the foundation needed to reconcile trading activity down to the unique trade and legal entity identifier (UTI and LEI) level of granularity. It also offers turnkey connectivity to trade repositories.
Features include a trade warehouse that pulls data from multiple sources and provides a standardised copy of all trading and collateral activity. A real-time module reconciles trades and creates the SFTR mandated-UTIs at the LEI level, with a full audit trail of the process including matching status reports.
IHS Markit’s solution is the latest in a line being rolled out to deal with the SFTR reporting requirements.
According to post-trade provider Pirum, SFTR reporting will be on a T+1 basis in line with existing regulatory reporting regimes.
It mandates two-sided reporting, with both collateral giver and taker required to report their side of the trade to a registered repository.
As part of the two-sided reporting obligation, a UTI must be included in their reports. “This value will be used by the trade repositories to match separately received reports from each counterpart to [a trade],” Pirum explained.
Pirum is leveraging its existing contract compare functionality to generate the UTIs needed for transaction reporting.
It promises that generating UTIs from positions matched in Pirum will ensure that trades submitted to repositories will have a higher matching rate once reconciled, reducing the amount of incorrect reports that counterparts need to review.
EquiLend recently revealed that it too is working on a solution to meet the reporting requirements for trades and collateral under SFTR.
The trading and post-trade service provider already captures much of the information required by SFTR, meaning it can create the UTI immediately either at the point of trade or during the post-trade comparison process.
The European Securities Markets Authority (ESMA) issued the level two consultation on SFTR in September, appearing to give market participants some hope that its requirements would be dialled back.
ESMA appeared to pull back on the requirement to report on collateral used as part of a trade on a T+1 basis, as well as admit that there were still some clashes with the European Market Infrastructure Regulation.
The feedback from this second stage will be used to finalise the draft technical standards, which will be submitted to the European Commission by the end of Q1 2017. The final version of SFTR will then come into force from 2018.
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