Reporting is "two sided," so each entity is responsible for its own reports, except for transactions between an FC and a small NFC, in which case the FC is responsible for reporting the transaction. It is also possible to delegate reporting. The SFTR phases in the reporting obligation according to type of entity:3
- Banks and investment firms from
April 13, 2020 ; -
CCPs and central securities depositories (CSDs) from
July 13, 2020 ; -
Other FCs from
October 12, 2020 ; and -
NFCs from
January 11, 2021
EU banks and investment firms have been rolling out necessary diligence to categorise their clients and confidentiality waivers ahead of the launch, as well as installing new IT systems to report. ESMA's regulatory forebearance delays the reporting obligation for banks and investment firms from
ESMA states that it expects national regulators not to prioritise their supervisory actions towards any entity that was due to become subject to the obligation in April. The forebearance applies for any SFTs concluded until
In addition, ESMA states that it is not necessary to register any trade repositories for the purpose of SFTR before
ESMA's regulatory forebearance will be welcomed by banks and investment firms. However, those entities subject to the reporting obligation had hoped that it would be delayed until
Annex: Counterparties Subject to the SFTR
EU | NON-EU |
EU counterparty to a SFT | All branches of an EU counterparty to a SFT, irrespective of where they are located |
EU branches of third-country counterparty if the SFT is concluded in the course of business of the EU branch | |
UCITS Management/Investment Companies | |
Alternative | |
EU counterparty engaging in reuse | |
EU branches of third country counterparty engaging in reuse if the reuse is concluded in the course of operations of the EU branch | A counterparty engaged in reuse where the reuse concerns financial instruments provided under collateral arrangement by (i) a counterparty established in the EU or (ii) an EU branch of a counterparty established in a third country |
Counterparties:
|
Footnotes
2 Regulation (EU) 2015/2365 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012.
3 Details of the reporting requirements are set out in Commission Delegated Regulation (EU) 2019/356 of
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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