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ESMA Clarifies SFTR Reporting

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

The guidelines aim to clarify a number of provisions of SFTR and to provide practical guidance on the implementation of some of those provisions.

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

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.

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

To read ESMA’s full press release as well as access the final report, guidelines, validation rules and statement, please click here

ISLA are in the process of undergoing a detailed review of the final report and validation rules on behalf of the industry, and in line with its own recommendations and feedback to ESMA.  With regards to the LEI statement and Issuer LEI, ISLA recognises the grace period that has been introduced to support a smooth introduction of the LEI requirements under the regime.  It will be discussing this alongside any other initial observations at the upcoming ISLA Steer Co. meeting on Thursday 9th January.

If you are not part of the SFTR work groups or streams, or would like more information, please visit our SFTR page or contact sftr@isla.co.uk.

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