ESMA PUBLISHED FURTHER CLARIFICATIONS ON SFTR REPORTING

The European Securities and Markets Authority (ESMA) has published the Guidelines on reporting under the Securities Financing Transactions Regulation (SFTR) and a final report, as well as amended SFTR validation rules and a statement on Legal Entity Identifiers (LEI).

These guidelines apply in relation to the SFT reporting obligation as provided in Article 4 SFTR, the TR obligations under Articles 5(7) and 12 SFTR, as well as the reporting start date as determined in Article 33(2) SFTR. They aim to clarify a number of provisions of SFTR and to provide practical guidance on the implementation of some of those provisions. The guidelines provide further clarification to the following aspects: 

• the reporting start date when it falls on a non-working day.
• the number of reportable SFTs;
• the population of reporting fields for different types of SFTs;
• the approach used to link SFT collateral with SFT loans;
• the population of reporting fields for margin data;
• the population of reporting fields for reuse, reinvestment and funding sources data;
• the generation of feedback by TRs and its subsequent management by counterparties, namely in the case of (i) rejection of reported data and (ii) reconciliation breaks; and
• the provision of access to data to authorities by TRs.

The final report on Guidelines on reporting under SFTR contains a detailed assessment of the feedback received from stakeholders to the proposals in the ESMA consultation paper published in May 2019, as well as a more detailed discussion on the market transactions that are not in scope.

The amended SFTR validation rules are fully aligned with the updated XML schemas published in December 2019, as well as with the published LEI statement.

The LEI statement clarifies the expectations with regards to reporting of LEI for issuers of securities used in SFTs, as well as the relevant supervisory actions to be carried out by authorities.