SFTR Shorts #2

SFTR Shorts, Part 2

This article is the second part of the ‘SFTR Shorts’, a series of bite-sized discussions around various aspects of the Securities Financing Transaction Regulation (SFTR). Alan McIntyre, Senior BA and Industry Relations Lead at Regtek.Solutions drills into various aspects of the reporting requirements under SFTR and identifies some of the challenges that firms will need to consider. Register here to hear more during our webinar on SFTR on the 13th of March. 

While the discussion paper¹ had set out the aim to follow the EMIR model of Counterparty Data and Common Data the final report on the RTS² arrived upon 4 tables:

Table 1 – Counterparty Data

Table 2 – Loan and Collateral Data

Table 3 – Margin Data

Table 4 – Re-use, Cash Reinvestment and Funding Sources Data

While these four tables look daunting at first glance, it’s simpler to visualise them as the three submission messages that arise from them:

The 18 Counterparty Date fields and 99 Loan and Collateral Data fields are submitted as one message and can be thought of as the ‘trade message’ that describes the SFT transaction being reported.

The 20 Margin Data fields are a supplementary message that includes details of the Initial, Variation and Excess margin both posted and received. This is very much like the Collateral reports in EMIR.

And finally, the 16 fields in the snappily titled Re-use, Cash Reinvestment and Funding Sources Data fields are an additional supplementary message that provide details including ‘estimated reuse’, ‘reinvested cash’ and ‘market value of the funding sources. Sticking with the EMIR comparison this is like the Valuation message in EMIR but serving a slightly different purpose.

So while I don’t want to underestimate the challenges presented in collating, validating and reporting the 156 fields included in these 4 tables, I do personally feel it’s far simpler to visualize them as the three message types that arise:

 

Alan McIntyre

Senior BA and Industry Relations Lead at RegTek.Solutions

 

Download the PDF version of this article.

Please join the discussion with Alan on the LinkedIn group: SFTR Transaction Reporting group 

Missed last week’s SFTR Short? Read it here.

  1. https://www.esma.europa.eu/sites/default/files/library/2016-356.pdf
  2. https://www.esma.europa.eu/sites/default/files/library/esma70-708036281-82_2017_sftr_final_report_and_cba.pdf
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SFTR