COVID-19 – ESMA postpones reporting obligations under SFTR


19 March 2020 In response to concerns raised by ICMA and ISLA in a letter on 16 March, ESMA has issued a public statement on Actions to mitigate the impact of COVID-19 on the EU financial markets – postponement of the reporting obligations related to securities financing transactions under the Securities Financing Transactions Regulation and under Markets in Financial Instruments Regulation.

The statement effectively postpones the first phase of the SFTR reporting go-live applicable to banks and investment firms by 3 months, from 11 April to 13 July. More specifically, ESMA clarifies:     
“ESMA therefore expects competent authorities not to prioritise their supervisory actions towards counterparties, entities responsible for reporting and investment firms in respect of SFT reporting obligations, under SFTR and under MIFIR, as of 13 April 2020 and until 13 July 2020, including regarding to SFTs concluded in that period of time, and to generally apply their risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.
Further, ESMA does not consider it necessary to register any TR ahead of 13 April 2020. This will give TRs more time to cope with the emergency and be ready to support the new reporting regime at a later point in time. ESMA is also not available to record the details of SFTs. As a result, counterparties, entities responsible for reporting and report submitting entities will be unable to report by the reporting start date.”

While this move is broadly welcome, ICMA continues to monitor closely any further developments in relation to the COVID-19 pandemic and will liaise with ESMA as regards further action, as required. This work is done in close consultation with member firms represented in the European Repo and Collateral Council's SFTR Task Force, which brings together representatives from around 150 firms to coordinate the industry’s SFTR implementation work in relation to repo.
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