KDPW OFFERS THE SFTR TRADE REPOSITORY SERVICE AS OF 13 JULY 2020.
In view of new reporting obligations under Regulation (EU) 2015/2365
of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse (Securities Financing Transaction Regulation, SFTR), which imposes the obligation of reporting details of securities financing transactions (SFT) to authorised trade repositories on all market participants, including financial and non-financial counterparties, KDPW has developed a service through which market participants can meet the reporting obligation.
WHO IS REQUIRED TO REPORT SFT DETAILS TO AUTHORISED TRADE REPOSITORIES?
The obligation of reporting SFT to authorised trade repositories applies to all business entities in the European Union, including both financial and non-financial entities (irrespective of the business sector).
The reporting obligation is effective as of 13 July 2020 for:
- investment firms,
- credit institutions,
- CSDs and CCPs.
The reporting obligation will take effect as of 12 October 2020 for:
- insurance/reinsurance establishments,
- pension funds,
- UCITS (undertakings in the collective investment in transferable securities),
- AIF (alternative investment funds).
The reporting obligation will take effect as of 11 January 2021 for:
KDPW TRADE REPOSITORY
The complementary services offered by KDPW provide participants of the trade repository (both under SFTR and EMIR) with a range of key benefits including::
- non-financial institutions.
- existing communication interfaces of the trade repository;
- the option of meeting both reporting obligations in a single trade repository (enabling cost and workload reductions thanks to a single communication channel);
- the expertise and experience of KDPW Trade Repository staff;
- professional support in the harmonisation of reporting with the SFTR standards;
- off-the-shelf technology solutions;
- support for SFTs settled in KDPW.
ESMA has extended the registration of the KDPW Trade Repository to include the reporting of transactions under the SFTR, effective as of 7 May 2020.
The Securities Financing Transaction Regulation (SFTR) is an important part of EU’s efforts to improve the transparency of securities financing transaction markets and consequently also of the banking sector and the broadly understood financial system. The SFTR requires that details of SFTs are to be reported to authorised trade repositories by all market participants, including financial and non-financial counterparties. The SFTR ensures that European supervisory authorities have access to details of securities financing transactions and aims to improve risk monitoring tools, which should improve the safety of the financial markets.
Examples of SFTs::
- securities lending and borrowing,
- repo and reverse repo transactions in securities and guaranteed rights,
- buy-sell-back and sell-buy-back transactions in securities, commodities and guaranteed rights,
- collateral management transactions.
The definition of securities financing transactions under the SFTR does not include derivatives as defined under EMIR (Regulation No. 648/2012). However, it includes liquidity swaps and collateral swaps, which are not covered by the definition of derivatives under EMIR.
EFFECTIVE DATE OF THE REGULATION
On 31 March 2017, ESMA published the Final Report - Final Report - Technical standards under SFTR and certain amendments to EMIR.
The ESMA implementing standards provide details concerning SFT reporting, including the application of ISO 20022 methodology in reporting, validation and access to data, data collection and availability, use of standard identifiers including LEI, UTI and ISIN in order to improve data quality and aggregation across Trade Repositories.
Commission Delegated Regulation supplementing Regulation (EU) 2015/2365 of the European Parliament and of the Council with regard to regulatory technical standards was published in the EU Official Journal on 22 March 2019. The Commission Delegated Regulation came into force 22 days after the publication in the EU Official Journal, i.e., on 11 April 2019. The obligation of reporting securities financing transactions was to take effect for financial counterparties a year later, on 13 April 2020; however, due to the coronavirus pandemic, the effective date was postponed by ESMA and the Regulation took effect on 13 July 2020.
Validation rules and XML schemas for SFTR reporting
The system of KDPW SFTR Repository is based on ISO 20022 messages designed by ESMA:
ESMA XML schemas for SFTR reporting:
and on KDPW's own communications:
KDPW xml schemas for SFTR reporting
Contact with KDPW:
T: +48 22 537 95 72, +48 22 537 95 26