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EU SFT Regulation
The EU SFT Regulation (SFTR) was proposed in 2014 to foster transparency in repo and other SFT markets in Europe. In order to achieve this, SFTR is set to introduce, among other things, extensive transaction reporting requirements for SFTs. While many of the SFTR provisions already apply today, the reporting regime itself is still being specified in Level 2 technical standards. Reporting is currently expected to go live in April 2020.

In 2015, the ICMA ERCC created a dedicated SFTR Task Force. Over the past years the group has grown significantly in size, reflecting the scale of the challenge that SFTR poses to Repo and other SFT markets. The Task Force now includes representatives from close to 100 ICMA member firms covering the whole spectrum of the market, including buy-side, sell-side, market infrastructures, but also Trade Repositories and other service providers looking to develop solutions to help reporting firms comply with SFTR. The main objective of the ERCC SFTR Task Force is to develop a common understanding of the requirements and to develop market best practices in relation to SFTR reporting to complement guidance provided by regulators. The work is undertaken in close collaboration with other trade associations and the relevant regulators, in particular ESMA.  

For further information about ICMA’s work in relation to SFTR or if you would like to join the ERCC SFTR Task Force, please contact alexander.westphal@icmagroup.org.





SFTR Task Force update – February 2019

27 February 2019 - view the SFTR Task Force update.




ICMA podcast: an introduction to SFTR

22 February 2019 - SFTR is designed to encourage greater transparency in repo and securities lending and borrowing markets. It will introduce an extensive reporting regime for these transactions in Europe. Alexander Westphal from ICMA's Market Practice and Regulatory Policy team explains the implications of SFTR, the timetable for its introduction and what the ICMA is doing to help its members with implementation.





SFTR update presented at the ERCC Annual General Meeting on 31 January in Luxembourg

31 January 2019 - view the SFTR update presented at the ERCC AGM in Luxembourg.










SFTR implementation Q1 2019

10 January 2019 - download the latest SFTR update from ICMA’s Quarterly Report for the first quarter of 2019.















Commission adopts final RTS and ITS under SFTR

13 December 2018 - the European Commission has adopted the long-awaited SFTR technical standards specifying the extensive reporting regime for SFTs which the law is set to introduce. The technical standards were adopted as a package, including three delegated regulations with Regulatory Technical Standards (RTS) and one implementing regulation setting out Implementing Technical Standards (ITS), including Annexes:
  • Commission delegated Regulation with regard to regulatory technical standards specifying the details of securities financing transactions (SFTs) to be reported to trade repositories: Main text and Annex with reporting tables.
  • Commission delegated Regulation with regard to regulatory technical standards on the collection, verification, aggregation, comparison and publication of data on securities financing transactions (SFTs) by trade repositories: Main text and Annex with reconciliation requirements.
  • Commission delegated Regulation with regard to regulatory technical standards on access to details of securities financing transactions (SFTs) held in trade repositories: Main text.
  • Commission implementing Regulation laying down implementing technical standards with regard to the format and frequency of reports on the details of securities financing transactions (SFTs) to trade repositories: Main text and Annex with reporting tables.



ICMA publishes bilateral reconciliation exercise for repos and buy/sell-backs

31 May 2017 - In order to facilitate the upcoming implementation of the extensive SFTR reporting regime, the ICMA ERCC has launched a bilateral repo and buy/sell-back trade reconciliation exercise. All ERCC members are strongly encouraged to reach out to their major counterparties to test SFTR reconciliation, based on the standard document published by ICMA. The main aim of this exercise is to identify among all the reporting fields put forward by ESMA in the final draft technical standards those fields (and transaction types) that are most likely to cause problems in terms of reconciliation. Based on the outcome of the exercise, the ICMA ERCC aims to undertake further targeted industry work, including with the relevant vendors, to develop additional guidance and market practices for critical reporting fields and transaction types, where necessary, to avoid excessive operational burden in the future.

Download the instructions and templates for the ICMA ERCC bilateral reconciliation exercise




ESMA submits final draft RTS and ITS to the Commission

31 March 2017 – ESMA has submitted its final SFTR Report including the draft technical standards for review and endorsement to the European Commission.
ESMA’s final draft standards provide detailed provisions on:
  • SFT reporting – including the use of ISO 20022 methodology for reporting, validation and access to data;
  • data collection and availability – the use of standardised identifiers such as LEI, UTI and ISIN which should improve data quality and aggregation across TRs;
  • defined access levels for different public authorities;
  • registration and extension of registration of TRs – detailed requirements on:
    • verification of completeness and correctness of reports;
    • data availability and integrity;
    • operational separation;
    • ancillary services;
    • outsourcing;
    • IT resources; and
    • exchange of data on sanctions between authorities.



ESMA consultations on draft RTS and ITS under SFTR


Under the SFT Regulation the European Securities and Markets Authority (ESMA) is mandated to prepare regulatory and implementing technical standards (RTS and ITS) to specify the implementation details of the law. In particular, this includes important details of the extensive reporting framework for SFTs introduced by SFTR article 4.

On 11 March 2016, ESMA published a first discussion paper for public consultation to which the ICMA ERCC submitted a detailed response on 22 April 2016.

This was followed by an ESMA consultation paper published on 30 September 2016. The ICMA ERCC submitted its response on 30 November 2016, alongside some specific comments on the list of proposed reporting fields.  

On 31 March 2017, taking into account feedback received in response to the two public consultations, ESMA published the final draft RTS and ITS.




ICMA publishes regulatory overview paper and impact analysis on SFT reporting initiatives

Given the various ongoing initiatives, the ICMA ERCC Operations Group is actively working towards a better understanding of the regulatory requirements, their impact on the post-trade processing of repo transactions as well as solutions to help firms establish an efficient operating model to manage the changes. The latter includes work towards market-wide, standardized procedures, templates and messaging protocols.

The first step is to obtain a clear understanding of the various regulatory requirements. For this purpose, the ERCC Operations Group has published a detailed overview of all relevant regulatory initiatives on the identification and reporting of SFTs, including some background on each of the regulations and a summary of the key provisions. This paper is regularly updated and extended as the regulatory requirements continue to evolve. More recently the briefing paper has been supplemented by a set of slides, which aim to present in a simplified and clear way the operational challenges presented by the various regulations. The slides include flow diagrams which help to illustrate the impacts on the different stages of the repo lifecycle and include references to the more relevant sections of the detailed overview paper. This impact analysis serves as a problem statement but also sets out the agenda for the ERCC Operations Group by identifying a number of key areas of work where further harmonisation and standardisation may prove beneficial. While the impact analysis currently covers all the different SFT reporting initiatives, it is intended to add a separate section on CSDR requirements as soon as the related technical standards have been finalised by ESMA (expected in January 2016).    

Download the detailed SFT reporting overview (last update: 9 August 2016)

See the Impact Analysis slides (last update: 8 February 2016)