The European Securities and Markets Authority (ESMA) has approved the registrations of four trade repositories (TRs) for the Securities Financing Transactions Regulation (SFTR).
The four which are already registered with the European regulator comprise DTCC, UnaVista TRADEcho, Krajowy Depozyt Papierów Wartościowych and REGIS-TR. They are now authorised to handle all types of securities finance transactions, including repo, securities or commodities lending and borrowing transactions, buy-sell back or sell-buy back transactions and margin lending transactions.
“We’re pleased with this decision,” said Val Wotton, Managing Director, Repository & Derivatives Services at DTCC. “With less than three months remaining before SFTR’s implementation deadline for banks, investment firms, CCPs and CSDs, we are encouraged by the level of their preparations. We look forward to continuing to work with our community in support of their regulatory reporting efforts.”
Mark Husler, CEO, UnaVista added, “We are delighted that UnaVista has been approved by ESMA as a trade repository for the new SFTR. UnaVista’s approach to SFTR is to simplify things as much as possible for our community, that means making easy to prepare, test and connect and then providing tools to help firms improve their reporting once live.”
In March, ESMA offered a grace period of three months to 13 July 2020 due to the disruption wrought by COVID-19 which meant that many firms would not be able to meet the April deadline. The regulator recommended that national competent authorities (NCAs) apply a risk-based approach in relation to non-compliance with SFTR and exercise their supervisory powers in a proportionate manner.
The key objective of SFTR is to improve transparency and regulate the structured reporting of transactions such as securities lending, repos and buy-sell backs across EU capital markets. It also aims to mitigate the risks associated with shadow banking.
Firms will have to declare all in-scope instruments to an authorised TR in addition to any requirements under the European Markets Infrastructure Regulation and MiFID II.
TRs are commercial firms that centrally collect and maintain the records of SFTs reported to them. To be registered, a company must be able to demonstrate to ESMA that it can comply with the requirements of SFTR, including, most importantly, operational reliability, safeguarding and recording and transparency and data availability.