The EU SFT Regulation (SFTR) was proposed in 2014 to foster transparency in repo and other SFT markets in Europe. In order to achieve this, SFTR has introduced, among other things, extensive transaction reporting requirements for SFTs. The reporting regime went live in four phases. The first phase started on 13 July 2020 while the fourth and final phase of the reporting obligation went live on 11 January 2021. Since the end of the post-Brexit transition period on 31 December 2020, SFTR has been split into two separate reporting regimes for the EU (EU SFTR) and the UK (UK SFTR).
In 2015, the ICMA ERCC created a dedicated SFTR Task Force. Over the past years the group has grown significantly in size, reflecting the scale of the challenge that SFTR poses to Repo and other SFT markets. The Task Force now includes representatives from over 150 firms covering the whole spectrum of the market, including buy-side, sell-side, market infrastructure providers, but also Trade Repositories and other service providers that are offering solutions to help reporting firms comply with SFTR. The main objective of the ERCC SFTR Task Force is to develop a common understanding of the requirements and to develop market best practices in relation to SFTR reporting to complement guidance provided by regulators. The work is undertaken in close collaboration with other trade associations and the relevant regulators, in particular ESMA. The result of this work was published initially on 24 February 2020, in form of the detailed ICMA recommendations for Reporting under SFTR. A ninth edition of the guide was published on 5 April 2023 (see right-hand side).
Since go-live, authorised trade repositories (DTCC, Regis-TR, UnaVista and KDPW) are required to publish, every Tuesday, a set of summary statistics based on the transactions that have been reported to them in the previous week. ICMA collects, aggregates and tabulates this data each week from all TRs, and publishes the information on the SFTR Public Data page. The SFTR public data complements existing ICMA publications such as the semi-annual European Repo Survey, and further contributes to the transparency of the repo market.
View our one page guide to the essentials of SFTR.
For further information about ICMA’s work in relation to SFTR or if you would like to join the ERCC SFTR Task Force, please contact email@example.com or firstname.lastname@example.org.
ICMA publishes updated Master Regulatory Reporting Agreement
6 December 2023 ICMA has today, in collaboration with AFME, FIA, ISDA and ISLA, published an updated version of the Master Regulatory Reporting Agreement (MRRA) and the accompanying Explanatory Memorandum.
Originally published in 2019, the MRRA provides users with a template agreement for documenting regulatory reporting arrangements in relation to securities financing transactions and derivatives entered into under industry standard documentation, such as the Global Master Repurchase Agreement (GMRA).
The MRRA sets out common terms governing mandatory and delegated reporting of securities financing transactions under the SFTR as well as derivatives transactions under EMIR, compatible with changes introduced via EMIR Refit.
The updates to the 2023 version of the MRRA include changes to address the fact that UK SFTR and UK EMIR are now operational, and that UK SFTR does not apply to NFCs.
- MRRA December 2023
- MRRA Explanatory Memorandum December 2023
ICMA responds to the FCA consultation on amended validation rules and schemas for UK SFTR
15 September 2023 The FCA published the draft amended Validation Rules and XML schemas for UK SFTR on 1 August 2023. These documents are not the final versions but have been made available for consultation. The FCA invites comments on both documents from all relevant stakeholders and the final versions of the documents will be published afterwards. The proposed go-live date for the updated validation rules and schemas is 4 November 2024. ICMA assessed the changes with its SFTR Taskforce members and submitted its feedback to the FCA on 15 September 2023.
ESMA publishes updated validation rules and schemas for EU SFTR
8 March 2023 Today, ESMA published a set of long-awaited updates to the SFTR validation rules on their SFTR webpage, which are set to be implemented from 11 September 2023. The changes have been reviewed by ICMA and discussed with the members of the ERCC's SFTR Task Force, and subsequently integrated into the latest ICMA SFTR recommendations. Last October, ICMA took a proactive approach by submitting a detailed set of written comments for ESMA. These inputs were specifically intended to contribute to ESMA’s ongoing review of the SFTR Level 3 guidance, and it is worth noting that many of these suggestions have been taken into consideration, reflected in the rules update.
ICMA updates public version of its SFTR reporting recommendations
5 April 2023 ICMA has released today the ninth update to its detailed Recommendations for Reporting under SFTR. The updated version incorporates a few changes based on the recent updates made to ESMA’s validation rules on 8 March, as well as the ongoing discussions within the ERCC’s SFTR Task Force. The Guide is accompanied by a blackline version which offers an overview of the recent modifications. Additional documents that complement the Recommendations are also available on ICMA's SFTR member page.
ICMA analysis: SFTR public data for repo in 2022
4 April 2023 ICMA released a report today which provides a closer look at SFTR public data for the year 2022. In line with SFTR itself, the data is split between figures reported for the EU repo market and those for the UK repo market.
This follows an earlier report published in September 2021 which assessed the first year of SFTR public data on repo.
Since the go-live of SFTR reporting in July 2020, ICMA has been collecting SFTR public data points that the Trade Repositories (TRs) are mandated to release on a weekly basis. ICMA collects this data, consolidates it and publishes the information in an aggregated form. While the number of public data points is limited, it is still a useful resource and provides an additional element of transparency, as well as an interesting reference point for the data that ICMA makes available separately as part of its semi-annual European Repo Market Survey.
ICMA publishes updated version of its SFTR reporting recommendations
23 September 2022 ICMA has published today an updated version of its detailed Recommendations for Reporting under SFTR. This is the eighth update to the public version of the SFTR Guide since its initial release in February 2020. Compared to the previous public version, the updated Guide includes 6 new questions and numerous further updates, reflecting new insights as well as additional ESMA guidance, eg regarding the reporting of central bank SFTs in the UK, guidance on the reporting of settlement fails, other Q&As issued by ESMA, as well as statements on the reporting of third-country issuer LEIs from both ESMA and the FCA. A blackline version has been published alongside the Guide itself to provide a complete overview of the recent changes. The SFTR Recommendations will continue to evolve to reflect ongoing discussions within the ERCC’s SFTR Task Force as well as any further requirements published by regulators. New public versions of the Guide will be released periodically. In addition, ICMA members also have access to a range of further best practice documents which complement the Recommendations.
ICMA ERCC releases updated SFTR reporting recommendations
21 October 2021 The ERCC has today published an updated edition of the ICMA Recommendations for Reporting under SFTR. The ICMA Recommendations were initially published in February 2020 to help members interpret the regulatory reporting framework introduced by SFTR and to set out complementary best practice recommendations which provide additional clarity and address ambiguities in the official guidance. The updated Recommendations published today reflect recent updates to the SFTR validation rules and reporting schemas published by both ESMA and the FCA, other official guidance that has been released, in particular ESMA’s Q&As, but also many lessons learned during the first year of SFTR reporting. For ease of comparison, a blackline version has been published alongside the Guide itself which highlights all the changes that have been made compared to the previous public edition which was released in February 2021. Going forward, the document will continue to evolve to reflect ongoing discussions in the ERCC SFTR Task Force as well as any additional guidance received from regulators.
- ICMA Recommendations for Reporting under SFTR (updated version: 21 October 2021)
- Blackline version (showing all changes compared to the previous version published on 17 February 2021
- An extract of the SFTR sample reports (The full document is available to ICMA members through the ERCC SFTR Task Force member portal)
ICMA publishes analysis of the first year of data on repo from SFTR reporting
28 September 2021 Reporting under the EU’s Securities Financing Transactions Regulation (SFTR) went live on 13 July 2020. Based on the first full year of SFTR reported data, ICMA has published today an analysis of the key market features and trends in the European repo market.
The analysis relies on the summary statistics which authorised trade repositories (TRs) are required to provide under SFTR on a weekly basis. Since the start of reporting, ICMA has been collecting this data from the TRs, consolidating it and publishing the information in an aggregated form on the ICMA website.
The first part of the report looks at the initial six months of reporting for the whole EU-28 repo market, while part two focuses on the time period between January and July 2021, distinguishing between the EU-27 and the UK market segments. This reflects the split of SFTR reporting into separate EU and UK regimes following the end of the Brexit transition period. In addition, the report also reflects on some of the remaining issues with the quality of the SFTR public data, which are highlighted in the final chapter.
ICMA responds to the UK Wholesale Markets Review consultation
24 September 2021 ICMA submitted a detailed response to the UK’s HMT Wholesale Markets Review. The ERCC contributed to ICMA’s wider response with specific comments on the reporting of SFTs concluded with EU central banks (see question 94), which are currently reported under MiFIR. As part of the response, ICMA argues that MiFIR is not the appropriate framework for the reporting of SFTs and asks UK authorities to review the current approach to exclude all types of SFTs from MiFIR reporting. This would include SFTs concluded with EU central banks but also those transacted with the Bank of England.
SFTR reporting one year on
15 July 2021 Since the start of SFTR reporting on 13 July 2020, ICMA has been collecting and aggregating the SFTR public data on a weekly basis. Following the buy-side go-live in October 2020 and the start of reporting for non-financial counterparties in the EU; in January 2021, the data now covers the entire population of firms required to report under SFTR. ICMA has been publishing separate figures for the UK and the EU since SFTR was split into two separate reporting regimes after the post-Brexit transition period, which ended on 31 December 2020.
Under EU SFTR, firms reported on average per week new SFTs with a loan value of around 18 trillion EUR before Brexit (including the UK), which decreased to around 12 trillion EUR on average after the split of the two regimes. Out of this total, repos (both repurchase transactions and buy/sell backs) accounted for over 95% of the value. On the other hand, under UK SFTR the weekly average loan value of newly reported SFTs has been around 9 trillion EUR with a similar breakdown of SFT types. The two parts are larger than the previous total due to the significant overlap between both regimes. It is also important to note that there are still some data quality issues and inconsistencies, especially around the collateral figures which we hope will improve over time.
The SFTR public data complements existing ICMA publications, such as the European Repo Survey, which ICMA has been publishing on a semi-annual basis since 2001. The latest 40th landmark edition of the Repo Survey released in March 2021 included a detailed analysis of the available SFTR public data, based on the first six months of reporting. ICMA is currently reviewing the European Repo Survey in light of SFTR in order to assess the synergies between the two and help to achieve a more efficient and automated data collection process.
ICMA has led the industry’s SFTR implementation effort for repos through the ERCC SFTR Task Force, which brings together more than 150 firms across the repo market. Based on the Task Force discussions ICMA developed its detailed Recommendations for Reporting under SFTR which complement and supplement the regulatory framework and aim to ensure consistency in firms’ implementation efforts.
Further information on SFTR and ICMA’s related work is available on this webpage ;. For the full set of SFTR public data since the reporting start, please visit our SFTR public data page.
Industry associations publish UK version of the SFTR article 15 information statement
17 May 2021 The Association for Financial Markets in Europe (AFME), FIA, the International Capital Market Association (ICMA), the International Swaps and Derivatives Association, Inc. (ISDA) and the International Securities Lending Association (ISLA) jointly published a statement to help market participants comply with requirements under Article 15 of the UK Securities Financing Transactions Regulation. The Information Statement informs users of the general risks and consequences that may be involved in consenting to a right of use of collateral provided under a security collateral arrangement or of concluding a title transfer collateral arrangement (for example, the GMRA).
Joint industry letter on issuer LEIs
8 March 2021 ICMA, in association with ISLA, AFME, and AMAFI sent a joint communication to ESMA, various NCAs, and the FCA to reiterate concerns around the lack of availability of Legal Entity Identifiers (LEIs) for issuers outside of Europe. The letter was sent ahead of the end of a 12-month forbearance period in April for the reporting of non-EEA issuer LEIs that had been granted by ESMA. As part of the letter the associations submitted the results of a joint study joint study to quantify the gap in the issuer LEI coverage for active ISINs. Although the industry has been trying proactively to help encourage LEI issuance, in some major non-European markets ; the gap is still very significant. The letter proposes possible solutions and seeks further guidance on the issue from ESMA.
Sixth version of the ICMA SFTR Recommendations published
17 February 2021 The ICMA ERCC has released the sixth edition of the detailed ICMA Recommendations for Reporting under SFTR. Compared to the previous version published on 29 October 2020, the updated edition of the guide reflects the end of the Brexit transition period on 31 December and the resulting split of SFTR into an EU and a UK version, which the recommendations continue to cover both. The new version also incorporates further guidance released by both ESMA and the FCA, in particular ESMA’s Q&As. A number of sections have been substantially revised as a result, including the guidance around the reporting of settlement fails (see e.g. section 9.16 of the Guide). To allow for an easier comparison, ICMA published a blackline version alongside the guide itself; which shows all the changes that have been made since the last publication in late October. The SFTR Recommendations will continue to evolve to reflect ongoing discussions within the ERCC’s SFTR Task Force as well as any further official guidance published by regulators. Further updates will be made available on the ICMA website.
- ICMA Recommendations for Reporting under SFTR (updated version: 17 February 2021)
- Blackline version (showing all changes compared to the previous version published on 29 October 2020)
SFTR public data at the end of the Brexit transition
14 January 2021 ICMA has released the first set of SFTR public data after the end of the post-Brexit transition period. As of 1 January 2021, SFTR reporting has been split into two separate regimes, EU SFTR and UK SFTR. This has obviously had a significant knock-on impact on the SFTR public data. On 12 January, TRs published for the first time separate data sets for both jurisdictions. Given the significant overlap, it is not possible to simply combine the two datasets to produce a single aggregate figure and continue the existing time series collected since July 2020. Going forward, ICMA will therefore be publishing separate figures for UK SFTR and EU SFTR. For more information, please visit our SFTR public data page.
Non-financial counterparties start reporting under EU SFTR
11 January 2021 The fourth and final phase of EU SFTR reporting has gone live. As of today, EU SFTR reporting obligations will apply to EU non-financial counterparties (NFCs) including third country branches of NFCs located in the EU. However, UK NFCs (including their third country branches) are not in scope for the regime as the UK did not onshore the SFTR reporting obligation for NFCs. Next week’s EU public data (due to be published on 20 January) will include for the first time reports from NFCs. For more information, please visit our SFTR public data page. ICMA continues to publish aggregated SFTR data and to track the impact of today’s final go-live on the statistics.
ICMA recommends to exclude all SFTs from the scope of MiFIR reporting
20 November 2020 ICMA submitted a response to ESMA’s consultation paper on MiFIR transaction reporting and reference data. The consultation was launched on 24 September as a part of the ongoing review of MiFID II/R. The ERCC contributed to the broader ICMA response, focusing on the reporting of SFTs with EU central banks. These are exempted from SFTR reporting, but have in turn been included in the scope of MiFIR reporting. As our response to question 29 of the consultation explains in more detail, the ERCC believes that this approach is inconsistent and should be reconsidered. Reporting SFTs under MiFIR raises a number of practical problems as the framework is not designed to cater for SFTs and it therefore also does not produce any meaningful data for regulators. ICMA recommends amending the relevant article in MiFIR to clarify that all SFTs are excluded from the scope of MiFIR reporting.
ESMA issues statement on SFTR and Brexit
10 November 2020 ESMA has published a number of Brexit related statements, including a statement on Issues affecting EMIR and SFTR reporting following the end of the UK transition period on 31 December 2020. SFTR is covered in the second part of the statement which assesses the implications across a number of different aspects, including scope, reporting, reconciliation and TR portability. Annex 3 of the statement includes a useful summary table of the SFTR implications. ICMA is reviewing the document in more detail and will update our own guidance accordingly. A detailed breakdown of the post-Brexit reporting obligations under SFTR and MiFIR for UK, EU and non-EU counterparties is included in the latest edition of the ICMA SFTR recommendations (see section 1.16).
In the meantime, the FCA continues to work on the implementation of SFTR in the UK in view of the Brexit transition period coming to an end on 31 December. SFTR itself has already been on-shored into UK law. More recently, the FCA also published the related technical standards for UK SFTR which include some minor tweaks and changes to reflect their UK-specific application. Further guidance will follow in due course. More information is available on the FCA’s SFTR webpage.
ESMA publishes SFTR Q&As
5 November 2020 ESMA has published a first batch of Q&As to provide further guidance on SFTR implementation. The initial document addresses in total 13 questions across 5 topics, including several questions in relation to the reporting of settlement fails, which has been a contentious issue since the publication of the ESMA Guidelines back in January. ICMA is reviewing the Q&As with members of the ERCC SFTR Task Force and will follow up with ESMA as needed. Any guidance provided by ESMA will also be reflected in future updates of the ICMA SFTR Recommendations.
ICMA ERCC publishes fifth edition of its SFTR recommendations
29 October 2020 The ICMA European Repo and Collateral Council (ERCC) has published today an updated version of the ICMA Recommendations for Reporting under SFTR. This is the fifth public edition of the document, which was initially released on 24 February and last updated on 7 September.
The Recommendations aim to help members interpret the regulatory reporting framework specified by ESMA and set out complementary best practice recommendations to provide additional clarity and address ambiguities in the official guidance. Compared to the previous edition, the new version of the guide includes a number of further updates to address reporting issues raised by members since the initial go-live on 13 July, and it also covers a number of specific buy-side questions and important lessons learnt since the buy-side reporting go-live on 12 October. In addition, the latest version of the guide now also includes a detailed breakdown of the post-Brexit reporting obligations under SFTR and MiFIR for UK, EU and non-EU counterparties.
For ease of comparison, ICMA published, alongside the new guide, a blackline version which shows all the changes that have been made since the last publication in September. Going forward, the document will continue to evolve to reflect ongoing discussions in the ERCC SFTR Task Force as well as any additional guidance received from ESMA and/or the National Competent Authorities (NCAs). In addition to the detailed recommendations, ICMA has also developed a number of complementary best practice documents, including a comprehensive set of over 50 SFTR sample reports, which are available on the ICMA website.
- ICMA Recommendations for Reporting under SFTR (updated version: 29 October 2020)
- Blackline version (showing all changes compared to the previous version published on 7 September)
- ICMA SFTR sample reports (last updated: 30 June 2020)
Buy-side starts reporting under SFTR
12 October 2020 The third phase of SFTR reporting has gone live. As of today, SFTR reporting obligations will apply to investment funds, pensions funds and (re-)insurance undertakings, who will join sell-side firms, CCPs and CSDs, who have already been reporting for 3 months. The first few months of SFTR reporting have certainly exceeded expectations with consistently high acceptance rates reported by the trade repositories. It is hoped that the buy-side firms that start reporting today can build on and replicate this success.
Read the full ICMA statement.
ICMA responds to ESMA consultation on calculation of positions under SFTR
15 September 2020 ICMA’s ERCC submitted its response to the ESMA consultation on draft Guidelines on calculation of positions under SFTR. The aim of the Guidelines is to ensure consistency of position calculations across TRs. In its response the ERCC commented on many areas of the consultation, including the time of calculations, the scope of the data used in calculations, the data preparation, the recordkeeping of data and the calculation methodologies. Please access the full response for further details.
ICMA ERCC publishes fourth edition of its SFTR recommendations
7 September 2020 The ICMA European Repo and Collateral Council (ERCC) has published today an updated version of the ICMA Recommendations for Reporting under SFTR. This is the fourth public edition of the document, which was initially released on 24 February and previously updated on 30 June.
The aim of the Recommendations is to help members interpret the regulatory reporting framework specified by ESMA and to set out complementary best practice recommendations to provide additional clarity and address ambiguities in the official guidance. ; Now at close to 300 pages, the updated version of the guide covers a number of new questions, as well as additions and revisions to existing recommendations, partly to reflect members’ feedback and important lessons learned since the SFTR reporting go-live on 13 July.
For ease of comparison, ICMA published, alongside the new guide, a blackline version which shows all the changes that have been made since the last publication in June. Going forward, the document will continue to evolve to reflect ongoing discussions in the ERCC SFTR Task Force as well as any additional guidance received from ESMA and/or the NCAs.
- ICMA Recommendations for Reporting under SFTR (updated version: 7 September 2020)
- Blackline version (showing all changes compared to the previous version published on 30 June)
Almost 1.5 million trades reported under SFTR in week one
22 July 2020 In the first week of reporting under SFTR, firms reported 1,435,727 SFTs with a cash value of EUR 14.3 trillion and collateral value of EUR 17.8 trillion. Repo (both repurchase transactions and buy/sell-backs) accounted for 398,006 transactions (27.7% of the total), a total cash value of EUR 13.5 trillion (94.7%) and collateral value of EUR 17.5 trillion (98.4%).
Since 13 July, EU-incorporated and located banks and investment firms, as well as CCPs and CSDs, have had an obligation to report all new SFTs and subsequent life-cycle events to authorised trade repositories (TRs), who are responsible for validating the reports, reconciling the data and making the results available to regulators. All TRs authorised under SFTR - currently these are DTCC, Regis-TR, UnaVista and KDPW - are required to publish, every Tuesday, a set of summary statistics for the previous week.
ICMA will be collecting, aggregating and tabulating this data each week, and will provide regular detailed analysis in the form of charts and commentary, which will contribute to enhanced transparency of the repo market. The SFTR data will also be used to enrich other ICMA publications on repo, such as the twice yearly European repo survey, which will continue. However, it is important to note that, as not all aspects of SFTR have been finalised, the quality and consistency of the reported data is expected to gradually improve over time.
- See our SFTR public data page for further details and future data releases.
SFTR goes live
13 July 2020 Reporting under the EU’s SFT Regulation (SFTR) has started. Banks and investment firms, as well as CCPs and CSDs have an obligation to report all SFTs executed from today to authorised trade repositories, who in turn will validate and reconcile the reports and pass the data on to regulators. Reporting by banks and investment firms was due to go live on 13 April, but this was postponed by ESMA in March in response to the global COVID-19 pandemic. As a result, phases 1 and 2 of the SFTR reporting regime both went live today.
Today’s go-live is the culmination of several years of intensive cross-industry discussions and preparations. ICMA has been driving this collaborative effort through its SFTR Task Force which brings together around 650 individuals representing more than 150 firms across the whole market spectrum, including sell-side and buy-side participants, but also market infrastructures, trade repositories and other service providers. Based on extensive input from Task Force members, ICMA has put together detailed best practice recommendations for the industry which complement and supplement the regulatory framework and aim to ensure consistency in firms’ implementation efforts. The ICMA recommendations for reporting under SFTR were initially published in February 2020 and continue to evolve. A third version of the document was issued on 30 June, ahead of today’s go-live, but this is not the end of the journey. The implementation of the highly complex SFTR reporting regime will be an iterative process as not all aspects of SFTR have been finalised and the quality and consistency of the reported data is expected to gradually improve over time. Discussions in the SFTR Task Force will continue as firms learn the lessons from the first weeks of reporting. The ICMA recommendations will be updated to reflect those discussions, but of course also to incorporate any additional guidance expected from ESMA, e.g. in the form of Q&As. The open and constructive dialogue with regulators, including ESMA and the NCAs, has been at the core of the implementation work from the start and will continue to be central.
ICMA would like to congratulate all market participants and service-providers involved in this unique cross-industry effort and is looking forward to further supporting its members on the path to a more transparent, resilient and efficient repo market.
ICMA ERCC publishes second update to its SFTR recommendations
30 June 2020 The ERCC has today published a further update to the ICMA Recommendations for Reporting under SFTR. The document was initially published on 24 February, followed by a first comprehensive update on 22 April. The third public version published today includes a number of updates resulting from the ongoing discussions in the ERCC’s SFTR Task Force. Importantly, it also incorporates the latest guidance received from ESMA on 25 May in response to some outstanding ICMA queries on the final SFTR Guidelines (initially submitted to ESMA in late January). On the two key topics, the reporting of settlement fails and bilateral variation margining, ESMA decided unfortunately not to follow the ICMA proposals which were based on an established industry consensus and reflected in the previous recommendations. Aligning to the latest guidance therefore required extensive changes to some of the recommendations. While the current version of the Recommendations is in line with ESMA’s latest response, it is worth noting that ICMA has followed up with ESMA separately to reiterate its concerns with the guidance and to ask ESMA to reconsider. For reference, ICMA published a blackline version of the recommendations which highlights all the changes made since the previous published version (dated 22 April).
The ICMA Recommendations for Reporting under SFTR aim to help members interpret the regulatory reporting framework specified by ESMA and set out complementary best practice recommendations to provide additional clarity and address ambiguities in the official guidance. The recommendations are complemented by additional best practice documents developed by ICMA, including a set of SFTR sample reports and an overview of lifecycle event reporting for repos. Both documents have also been updated today to reflect the changes to the recommendations.
- ICMA Recommendations for Reporting under SFTR (updated version: 30 June 2020)
- Blackline version (showing all changes compared to the previous version dated 22 April)
Related best practice documents:
- SFTR sample reports (version: 30 June) – changes compared to the April version are listed in the “changes” tab
- Overview of repo lifecycle events reporting (version: 30 June)
ESMA confirms ICMA proposals for reporting of central bank repos under MiFIR
21 May 2020 In response to an ICMA query, ESMA has provided some clarifications on the reporting of repos transacted with EU central banks. Under SFTR, SFTs transacted with one of the 27 EU central banks that are part of the European System of Central Banks (ESCB) are exempted from the reporting obligation. However, these trades have in turn been included in the scope of MiFIR transaction reporting. This requirement will apply at the same time as SFTR goes live. However, there has been ;only limited additional guidance as to how repos and other SFTs can be reported under MiFIR, considering that the reporting framework has not been designed to cater for SFTs and their specific characteristics. Following extensive discussions, ICMA’s SFTR Task Force developed a proposal to report repo trades under MiFIR, consisting of two sample reports and an explanatory note. Both documents were submitted to ESMA in November 2019 for review and validation.
The ESMA response received on 8 May 2020 confirms all the main aspects of the ICMA proposals and also addresses two open questions that we submitted alongside those proposals. In particular:
- The basic principle proposed by ICMA was confirmed. Under MiFIR, it is the collateral that should be reported, not the repo itself.
- Only the purchase leg needs reporting.
- Repos with multiple collateral securities should be reported as a Complex Trade, a concept introduced for certain derivatives. This means breaking up such a repo into components.
- In cases where the collateral allocation is only available after the T+1 reporting deadline, ESMA leaves it to National Competent Authorities to assess whether the delay is justified, taking into account that the reported trade is an SFT.
- Pledge-based repos (which are really secured loans, not repos) must be reported, because the rules on what to report are set by SFTR, not MiFIR, and ESMA has interpreted SFTR as including pledge-based repos.
ICMA ERCC releases updated version of its SFTR recommendations
22 April 2020 The ERCC has today published an updated version of the ICMA Recommendations for Reporting under SFTR. The ICMA guide was initially published on 24 February and aims to help members interpret the regulatory reporting framework specified by ESMA and sets out complementary best practice recommendations to provide additional clarity and address ambiguities in the official guidance. As compared to the initial publication, the version published today includes relevant updates, including to reflect the recently granted 3-month delay to the first phase of the SFTR go-live as well as the forbearance on backloading. The updated version also covers a number of new questions, as well as additions and revisions to existing recommendations covered in the guide. For ease of comparison, ICMA published, alongside the new guide, a blackline version which shows all the changes that have been made since the initial publication. Going forward, the document will continue to evolve to reflect ongoing discussions in the ERCC SFTR Task Force as well as any additional guidance received from ESMA and/or the NCAs. Further updates will be made available on the ICMA website.
- ICMA Recommendations for Reporting under SFTR (updated version: 22 April 2020)
- Blackline version (showing all changes compared to the initial version published on 24 February)
Related best practice documents:
- SFTR sample reports (version: 24 April)
- Overview of repo lifecycle events reporting (version: 24 April)
ICMA offers clarification of ESMA’s delay to the SFTR go-live
31 March 2020 ICMA has published a summary of the latest ESMA statements issued on 19 March (and updated on 26 March) and their practical implications for reporting parties. The conclusions set out in the note have been agreed with members of ICMA’s SFTR Task Force and are intended to provide additional clarity for member firms and other SFTR stakeholders. The conclusions already reflect a number of informal discussions with ESMA and some NCAs, with whom the note has been shared, even if neither ESMA nor the NCAs are in a position to officially endorse the note.
ESMA clarifies position on backloading
26 March 2020 ESMA issued an updated version of their initial statement (published on 19 March) which granted a 3-month delay to the SFTR phase 1 go-live to 13 July. Responding to requests by ICMA and others, the updated statement clarifies some aspects of the initial statement which were not clear, specifically in relation to the implications for the backloading requirement. The updated statement clarifies that ESMA’s expectation that NCAs will not enforce reporting obligations between 11 April and 12 July also covers the back-loading provisions, for banks and credit institutions (phase 1), but also for all other firms that will eventually become subject to SFTR reporting obligations in the remaining three phases. In effect, this clarification allows all firms subject to SFTR reporting to no longer consider backloading as a requirement.
ICMA welcomes this clarification and the rapid and pragmatic response by ESMA. Complementing ESMA’s statement, a number of NCAs have already or are planning to publish additional updates confirming their specific plans to align with ESMA’s guidance.
UK: FCA approach
NL: AFM approach
COVID-19 – ESMA postpones reporting obligations under SFTR
19 March 2020 In response to concerns raised by ICMA and ISLA in a letter on 16 March, ESMA has issued a public statement on Actions to mitigate the impact of COVID-19 on the EU financial markets – postponement of the reporting obligations related to securities financing transactions under the Securities Financing Transactions Regulation and under Markets in Financial Instruments Regulation.
The statement effectively postpones the first phase of the SFTR reporting go-live applicable to banks and investment firms by 3 months, from 11 April to 13 July. More specifically, ESMA clarifies:
"ESMA therefore expects competent authorities not to prioritise their supervisory actions towards counterparties, entities responsible for reporting and investment firms in respect of SFT reporting obligations, under SFTR and under MIFIR, as of 13 April 2020 and until 13 July 2020, including regarding to SFTs concluded in that period of time, and to generally apply their risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner.
Further, ESMA does not consider it necessary to register any TR ahead of 13 April 2020. This will give TRs more time to cope with the emergency and be ready to support the new reporting regime at a later point in time. ESMA is also not available to record the details of SFTs. As a result, counterparties, entities responsible for reporting and report submitting entities will be unable to report by the reporting start date.”
While this move is broadly welcome, ICMA continues to monitor closely any further developments in relation to the COVID-19 pandemic and will liaise with ESMA as regards further action, as required. This work is done in close consultation with member firms represented in the European Repo and Collateral Council's SFTR Task Force, which brings together representatives from around 150 firms to coordinate the industry’s SFTR implementation work in relation to repo.
ICMA together with ISLA writes to ESMA to request a delay to the implementation of reporting under SFTR
16 March 2020 Amidst the escalating COVID-19 pandemic, ICMA and ISLA have sent a joint letter to ESMA to ask for a delay to the SFTR reporting go-live date, due on 11 April 2020. In support of this request, the letter includes concrete examples of the significant challenges that the COVID-19 pandemic and the related measures pose to members’ SFTR implementation projects.
ICMA’s ERCC publishes guide to reporting under the SFTR ;
24 February 2020 The ERCC has today published its guide to reporting under the EU Securities Financing Transactions Regulation (SFTR). The ICMA guide aims to help members interpret the regulatory reporting framework specified by ESMA and sets out complementary best practice recommendations to provide additional clarity and address ambiguities in the official guidance. It is supplemented by a suite of sample reports and an overview of repo life-cycle event reporting, which have both been published today. The documents evolved over the past couple of years as a product of discussions within the ERCC’s SFTR Task Force, benefitting from substantial input provided by members. They will continue to evolve to reflect additional guidance from ESMA and/or the NCAs or changes in the market consensus in relation to a specific question or market practice.
On the occasion of the launch, ICMA hosted a webinar to discuss the role of the cross-industry work as well as the state of industry preparations less than 2 months ahead of the reporting go-live. The webinar was hosted by ICMA’s Richard Comotto and Alex Westphal who were joined by two members of the SFTR Task Force, Craig Laird (Morgan Stanley), who is chairing the group, and Ben Campion (UBS). A webinar recording is available here for ICMA members (login required).
- ICMA Recommendations for Reporting under SFTR
- SFTR sample reports
- Overview of repo lifecycle events reporting
ESMA releases final implementation guidance on SFTR reporting
6 January 2020 ESMA published today the long-awaited final Level 3 guidance for SFTR Reporting. Most importantly, this includes the final version of the detailed Reporting Guidelines, which incorporate stakeholder feedback to the consultation over summer on a draft version of the document. Alongside the Guidelines ESMA also published a Final Report summarising and responding to the consultation feedback, as well as an amended version of the SFTR Validation Rules and a statement on LEI codes. The latter responds to industry concerns in relation to the mandatory reporting of LEI codes for issuers, granting a 12-month grace period for the reporting of LEI codes of non-EU issuers. The package of ESMA’s Level 3 measures is completed by a set of XML schemas in ISO20022 format which specify standardised message formats for the communication between reporting firms and their TR, but also between TRs and between TRs and authorities.
- Guidelines for Reporting under Articles 4 and 12 SFTR
- Final Report on the Guidelines
- Amended SFTR Validation Rules
- Statement on LEIs
- Updated ISO20022 XML schemas
ICMA publishes Master Regulatory Reporting Agreement (MRRA) in association with AFME, FIA, ISDA and ISLA
19 December 2019 ICMA has today jointly published the Master Regulatory Reporting Agreement (MRRA), in association with AFME, FIA, ISDA and ISLA. The MRRA provides users with a template agreement for documenting regulatory reporting arrangements in relation to derivatives and securities financing transactions entered into under industry standard documentation, such as the Global Master Repurchase Agreement (GMRA). EMIR (as amended by EMIR Refit) and SFTR impose delegated and mandatory reporting obligations on parties entering into derivative and SFT contracts, respectively. The MRRA has been structured on a modular basis, featuring various schedules, a Derivatives Annex (in relation to EMIR) and a Securities Financing Transactions Annex (in relation to SFTR). Parties can assemble an agreement which is appropriate for their trading relationships and reflects their regulatory obligations.
- Master Regulatory Reporting Agreement (ICMA Members only)
- MRRA Explanatory Memorandum (ICMA Members only)
ICMA ERCC responds to ESMA’s consultation on SFTR Reporting Guidelines
30 July 2019 – The ICMA ERCC has submitted a detailed response to ESMA’s consultation on draft Guidelines in relation to SFTR Reporting under articles 4 and 12. The response was prepared based on feedback from the ERCC’s SFTR Task Force, which brings together more than 600 individuals from over 100 member firms, including sell-side, buy-side, market infrastructures and service providers, leading the industry’s implementation effort in relation to repo. The response form itself was submitted alongside two further documents prepared by the Task Force over the past months, a list of SFTR sample reports, as well as detailed overview table on the reporting of repo lifecycle events.
- ICMA ERCC consultation response: official ESMA format or ERCC response grid format
- SFTR sample reports
- Overview of Repo lifecycle events
ESMA issues draft SFTR Reporting Guidelines for consultation
27 May 2019 - ESMA has issued a consultation paper on draft Guidelines in relation to SFTR reporting. The consultation paper itself was published alongside an updated and consolidated version of the SFTR Validation Rules. Both documents form part of the so-called Level 3 measures which ESMA is mandated to adopt and which serve to provide further guidance for the industry in relation to SFTR implementation, beyond the SFTR itself and the related technical standards. The deadline for stakeholders to submit a response to the consultation is Monday 29 July 2019.
Final RTS and ITS under SFTR published in the Official Journal
22 March 2019 - The full package of SFTR Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) has been published in the EU’s Official Journal. This marks an important milestone in the SFTR adoption process. In total, this consists of 10 different delegated and implementing regulations which will enter into force 20 days after their publication, i.e. on 11 April 2019. Key documents include:
- Delegated Regulation 2019/356 specifying the details of securities financing transactions (SFTs) to be reported to trade repositories, including Annex with reporting tables;
- Implementing Regulation 2019/363 with regard to the format and frequency of reports on the details of SFTs to trade repositories, including Annex with reporting tables and format descriptions; and
- Delegated Regulation 2019/358 on the collection, verification, aggregation, comparison and publication of data on SFTs by trade repositories, including Annex with reconciliation requirements.
Besides providing the final technical details, the publication of the RTS and ITS also determines the implementation timeline of SFTR. The relevant reporting go-live dates are as follows (where the legal go-live date below is on the weekend, effective go-live is on the next business day):
- 11 April 2020: Reporting go-live for banks and investment firms (12 months after entry into force)
- 11 July 2020: Reporting go-live for CCPs & CSDs (15 months after entry into force)
- 11 October 2020: Reporting go-live for most of the buy-side (18 months after entry into force)
- 11 January 2021: Reporting go-live for non-financial counterparties (NFCs) (21 months after entry into force)
Commission adopts final RTS and ITS under SFTR
13 December 2018 - the European Commission has adopted the long-awaited SFTR technical standards specifying the extensive reporting regime for SFTs which the law is set to introduce. The technical standards were adopted as a package, including three delegated regulations with Regulatory Technical Standards (RTS) and one implementing regulation setting out Implementing Technical Standards (ITS), including Annexes:
- Commission delegated Regulation with regard to regulatory technical standards specifying the details of securities financing transactions (SFTs) to be reported to trade repositories: Main text and Annex with reporting tables.
- Commission delegated Regulation with regard to regulatory technical standards on the collection, verification, aggregation, comparison and publication of data on securities financing transactions (SFTs) by trade repositories: Main text and Annex with reconciliation requirements.
- Commission delegated Regulation with regard to regulatory technical standards on access to details of securities financing transactions (SFTs) held in trade repositories: Main text.
- Commission implementing Regulation laying down implementing technical standards with regard to the format and frequency of reports on the details of securities financing transactions (SFTs) to trade repositories: Main text and Annex with reporting tables.
ICMA publishes bilateral reconciliation exercise for repos and buy/sell-backs
31 May 2017 - In order to facilitate the upcoming implementation of the extensive SFTR reporting regime, the ICMA ERCC has launched a bilateral repo and buy/sell-back trade reconciliation exercise. All ERCC members are strongly encouraged to reach out to their major counterparties to test SFTR reconciliation, based on the standard document published by ICMA. The main aim of this exercise is to identify among all the reporting fields put forward by ESMA in the final draft technical standards those fields (and transaction types) that are most likely to cause problems in terms of reconciliation. Based on the outcome of the exercise, the ICMA ERCC aims to undertake further targeted industry work, including with the relevant vendors, to develop additional guidance and market practices for critical reporting fields and transaction types, where necessary, to avoid excessive operational burden in the future.
Download the instructions and templates for the ICMA ERCC bilateral reconciliation exercise
ESMA submits final draft RTS and ITS to the Commission
31 March 2017 – ESMA has submitted its final SFTR Report including the draft technical standards for review and endorsement to the European Commission.
ESMA’s final draft standards provide detailed provisions on:
- SFT reporting – including the use of ISO 20022 methodology for reporting, validation and access to data;
- data collection and availability – the use of standardised identifiers such as LEI, UTI and ISIN which should improve data quality and aggregation across TRs;
- defined access levels for different public authorities;
- registration and extension of registration of TRs – detailed requirements on:
- verification of completeness and correctness of reports;
- data availability and integrity;
- operational separation;
- ancillary services;
- IT resources; and
- exchange of data on sanctions between authorities.
ESMA consultations on draft RTS and ITS under SFTR
Under the SFT Regulation the European Securities and Markets Authority (ESMA) is mandated to prepare regulatory and implementing technical standards (RTS and ITS) to specify the implementation details of the law. In particular, this includes important details of the extensive reporting framework for SFTs introduced by SFTR article 4.
On 11 March 2016, ESMA published a first discussion paper for public consultation to which the ICMA ERCC submitted a detailed response on 22 April 2016.
This was followed by an ESMA consultation paper published on 30 September 2016. The ICMA ERCC submitted its response on 30 November 2016, alongside some specific comments on the list of proposed reporting fields. ;
On 31 March 2017, taking into account feedback received in response to the two public consultations, ESMA published the final draft RTS and ITS.
ICMA publishes regulatory overview paper and impact analysis on SFT reporting initiatives
Given the various ongoing initiatives, the ICMA ERCC Operations Group is actively working towards a better understanding of the regulatory requirements, their impact on the post-trade processing of repo transactions as well as solutions to help firms establish an efficient operating model to manage the changes. The latter includes work towards market-wide, standardized procedures, templates and messaging protocols.
The first step is to obtain a clear understanding of the various regulatory requirements. For this purpose, the ERCC Operations Group has published a detailed overview of all relevant regulatory initiatives on the identification and reporting of SFTs, including some background on each of the regulations and a summary of the key provisions. This paper is regularly updated and extended as the regulatory requirements continue to evolve. More recently the briefing paper has been supplemented by a set of slides, which aim to present in a simplified and clear way the operational challenges presented by the various regulations. The slides include flow diagrams which help to illustrate the impacts on the different stages of the repo lifecycle and include references to the more relevant sections of the detailed overview paper. This impact analysis serves as a problem statement but also sets out the agenda for the ERCC Operations Group by identifying a number of key areas of work where further harmonisation and standardisation may prove beneficial. While the impact analysis currently covers all the different SFT reporting initiatives, it is intended to add a separate section on CSDR requirements as soon as the related technical standards have been finalised by ESMA (expected in January 2016).
Download the detailed SFT reporting overview (last update: 9 August 2016)
See the Impact Analysis slides (last update: 8 February 2016)
ICMA SFTR Webinars
17 September 2020 - SFTR in action - Lessons learned from the first two months of reporting
The first phase of SFTR reporting went live on 13 July. Building on the experience of the first two months, ICMA held a webinar to take stock of the progress so far and the key outstanding issues. With the reporting go-live of the buy-side less than a month away, a key focus was on the lessons learned from the first two months. The webinar featured a few short presentations to provide participants with an update on ICMA’s ongoing work on SFTR implementation, followed by an in-depth panel discussion with practitioners.
View the webinar | Download the presentation
8 April 2020 - SFTR - Latest Developments & ICMA Best Practices, Alexander Westphal, Director, ICMA
In place of the March ERCC General Meeting which was cancelled due to the COVID-19 pandemic, ICMA organised a number of webinar presentations to bring our members and the wider market up-to-date on key topics that have impacted the repo market. This webinar was part of the ERCC updates and covered the latest development on SFTR implementation and ICMA’s work in relation to best practices.
View the webinar | Download the presentation
24 February 2020 - ICMA guide to reporting under SFTR - launch and webinar
On the occasion of the launch of the ICMA guide to reporting under SFTR, ICMA hosted a webinar to discuss the role of the cross-industry work as well as the state of industry preparations less than 2 months ahead of the reporting go-live. The webinar was hosted by ICMA’s Richard Comotto and Alex Westphal who were joined by two members of the SFTR Task Force, Craig Laird (Morgan Stanley), who is chairing the group, and Ben Campion (UBS).
A webinar recording is available here for ICMA members (login required).
ICMA SFTR checklist for non-European firms
13 November 2020 – ICMA has prepared a checklist for non-European firms to help them assess their reporting obligations under the EU’s SFT Regulation as well as the UK’s SFT Regulation post-Brexit. The document looks at not only the geographical scope of SFTR, but also the different instruments that it applies to.
ICMA Quarterly Report - SFTR update
12 January 2021 - download the latest SFTR update from ICMA’s Quarterly Report for the first quarter of 2021. For our article on MiFIR reporting and SFTs, please refer to p54 in the full QR report on the right.
Presentations on SFTR
7 October 2020 - view the SFTR update presented at the ERCC’s latest (virtual) Annual General Meeting.
24 October 2019 - view the SFTR update presented at the SFTR Seminar in Luxembourg.
ICMA podcast: an introduction to SFTR
22 February 2019 - SFTR is designed to encourage greater transparency in repo and securities lending and borrowing markets. It will introduce an extensive reporting regime for these transactions in Europe. Alexander Westphal from ICMA's Market Practice and Regulatory Policy team explains the implications of SFTR, the timetable for its introduction and what the ICMA is doing to help its members with implementation.
SFTR Information Statement
On 13 April 2016 the Association for Financial Markets in Europe (AFME), FIA, the International Capital Market Association (ICMA), the International Swaps and Derivatives Association, Inc. (ISDA) and the International Securities Lending Association (ISLA) jointly published a statement to help market participants comply with new requirements under the European Union’s Securities Financing Transaction Regulation (SFTR).
View the press release.
View the information statement (updated 13 May 2016).
This page displays the most up-to-date version of the work in progress best practice documents put together by the SFTR Task Force.
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