Various regulatory initiatives are currently under way to foster transparency in repo and securities lending and borrowing markets. Taken together, these initiatives have the potential to substantially change the way repos and other securities financing transactions (SFTs) are processed today. In anticipation of the upcoming changes, 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.

SFT identification and reporting: Regulatory overview paper and impact analysis

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).    

Click here to download the detailed SFT reporting overview (last update: 9 August 2016)

Click here to see the Impact Analysis slides (last update: 8 February 2016)

Harmonised template for repo trade matching and affirmation
In parallel to the monitoring of the various regulatory initiatiatives, the ICMA ERCC Operations Group is also working on the concrete implementation. Following several months of work and in close cooperation with several of the post-trade vendors the ICMA ERCC Operations Group has published a standardised template for trade matching and affirmation (TMA) of repos, which aims to establish a list of harmonised matching fields that can be used by firms and which supports the fulfilment of the various reporting requirements. For more background information and to access both the Template and and a supplementary Glossary of Terms, click here.

ICMA seminar on The Future Challenges in Post-Trade Processing for Repo
On Wednesday, 10 February 2016, the ICMA ERCC Operations Group will be hosted the second edition of its Post-Trade Seminar on The future challenges in post-trade processing for repo.

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