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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 ercc@icmagroup.org.

  Sign up for our SFTR workshop - repo reporting in practice Frankfurt, 18 February 2020

SFTR Task Force update

ICMA publishes Master Regulatory Reporting Agreement (MRRA) in association with AFME, FIA, ISDA and ISLA

19 July 2019 ICMA has today jointly published the Master Regulatory Reporting Agreement (MRRA), in association with AFME, FIA, ISDA and ISLA. The MRRA provides users with a template agreement for documenting regulatory reporting arrangements in relation to derivatives and securities financing transactions entered into under industry standard documentation, such as the Global Master Repurchase Agreement (GMRA). EMIR (as amended by EMIR Refit) and SFTR impose delegated and mandatory reporting obligations on parties entering into derivative and SFT contracts, respectively. The MRRA has been structured on a modular basis, featuring various schedules, a Derivatives Annex (in relation to EMIR) and a Securities Financing Transactions Annex (in relation to SFTR). Parties can assemble an agreement which is appropriate for their trading relationships and reflects their regulatory obligations.

ICMA ERCC responds to ESMA’s consultation on SFTR Reporting Guidelines

30 July 2019 – The ICMA ERCC has submitted a detailed response to ESMA’s consultation on draft Guidelines in relation to SFTR Reporting under articles 4 and 12. The response was prepared based on feedback from the ERCC’s SFTR Task Force, which brings together more than 600 individuals from over 100 member firms, including sell-side, buy-side, market infrastructures and service providers, leading the industry’s implementation effort in relation to repo. The response form itself was submitted alongside two further documents prepared by the Task Force over the past months, a list of SFTR sample reports, as well as detailed overview table on the reporting of repo lifecycle events.

ESMA issues draft SFTR Reporting Guidelines for consultation

27 May 2019 - ESMA has issued a consultation paper on draft Guidelines in relation to SFTR reporting. The consultation paper itself was published alongside an updated and consolidated version of the SFTR Validation Rules. Both documents form part of the so-called Level 3 measures which ESMA is mandated to adopt and which serve to provide further guidance for the industry in relation to SFTR implementation, beyond the SFTR itself and the related technical standards. The deadline for stakeholders to submit a response to the consultation is Monday 29 July 2019.

Final RTS and ITS under SFTR published in the Official Journal  

22 March 2019 - The full package of SFTR Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) has been published in the EU’s Official Journal. This marks an important milestone in the SFTR adoption process. In total, this consists of 10 different delegated and implementing regulations which will enter into force 20 days after their publication, i.e. on 11 April 2019. Key documents include:
  • Delegated Regulation 2019/356 specifying the details of securities financing transactions (SFTs) to be reported to trade repositories, including Annex with reporting tables;
  • Implementing Regulation 2019/363 with regard to the format and frequency of reports on the details of SFTs to trade repositories, including Annex with reporting tables and format descriptions; and
  • Delegated Regulation 2019/358 on the collection, verification, aggregation, comparison and publication of data on SFTs by trade repositories, including Annex with reconciliation requirements.
Besides providing the final technical details, the publication of the RTS and ITS also determines the implementation timeline of SFTR. The relevant reporting go-live dates are as follows (where the legal go-live date below is on the weekend, effective go-live is on the next business day):
  • 11 April 2020: Reporting go-live for banks and investment firms (12 months after entry into force)
  • 11 July 2020: Reporting go-live for CCPs & CSDs (15 months after entry into force)
  • 11 October 2020: Reporting go-live for most of the buy-side (18 months after entry into force)
  • 11 January 2021: Reporting go-live for non-financial counterparties (NFCs) (21 months after entry into force)

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)
ICMA Quarterly Report - SFTR update

10 January 2020 - download the latest SFTR update from ICMA’s Quarterly Report for the first quarter of 2020.

Presentations on SFTR

24 October 2019 - view the SFTR update presented at the SFTR Seminar in Luxembourg.

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 Information Statement

On 13 April 2016 the Association for Financial Markets in Europe (AFME), FIA, the International Capital Market Association (ICMA), the International Swaps and Derivatives Association, Inc. (ISDA) and the International Securities Lending Association (ISLA) jointly published a statement to help market participants comply with new requirements under the European Union’s Securities Financing Transaction Regulation (SFTR).

View the press release.
View the information statement (updated 13 May 2016).

This page displays the most up-to-date version of the work in progress best practice documents put together by the SFTR Task Force.

You will need your user name and password to access this page. If you are a member of the SFTR Task Force or ICMA and are having difficulties accessing this content please contact membership@icmagroup.org.

Access the SFTR Task Force Resource Area