Mitigating Risk

Are You Ready for SFTR? Three Things to Consider as the Compliance Countdown Begins

By DTCC Connection Staff | Jan 16, 2019

Are You Ready for SFTR? Three Things to Consider as the Compliance Countdown Begins

The approval of the regulatory technical standards (RTS) by the European Commission for Securities Finance Transaction Reporting (SFTR) kicks off the countdown to the early 2020 compliance date. The securities financing industry has a significant amount of work to do, particularly around data availability and workflows. Large broker dealers and agent lenders have kicked off their preparations, however many of the smaller banks and buy-side firms have not yet initiated their response and it’s recommend that they begin as soon as possible.

As firms start to prepare, it will be important to take a more strategic approach to addressing the SFTR requirements, rather than viewing them as a compliance exercise. In doing so, firms will have an opportunity to gain wider advantages such as increased levels of pre-trade matching, reduced trade fails and greater collateral efficiencies, which will result in significant benefits such as balance sheet optimisation.

DTCC SFTR subject matter experts will host a webinar on Thursday, January 31 at 2:00 p.m. GMT to discuss the following three top considerations firms should be taking into account as the SFTR compliance countdown begins:

SFTR's Impact on the Industry

In developing their compliance strategies firms need to understand and address the significant ways SFTR will impact the industry and their own business. These impacts include changes to liquidity and collateral, reporting requirements, breaks, disclosures, and automation and multilateral trading facility use. Preparation for compliance will also include the mandatory selection of a trade repository for reporting purposes.

The Importance of Selecting a Trade Repository

There are a number of factors that firms should consider when selecting a trade repository (TR), a critical step for firms on their path to SFTR compliance. These include:

  • What is the TR’s track record?
  • What functionality does the TR offer?
  • Can the TR handle heavy reporting volumes?
  • How can the TR improve your breaks management?
  • Can the TR accommodate future expansion of SFTR implementation across other jurisdictions?

The SFTR Journey – From Implementation, Testing and Beyond

Leveraging proven implementation methodologies and testing structures, DTCC will partner with and support firms through every step of their SFTR journey. From a simple onboarding process, to early pre-user acceptance testing, access to a fully functional user acceptance environment, testing tools and 24 x 7 production support, our implementation package allows firms, at no additional charge, to move seamlessly into production with confidence that they are compliance ready.

Register now for the “Are you ready for SFTR? The compliance countdown begins” webinar Thursday, January 31 at 2:00 p.m. GMT to learn more.


 

 

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