SFTR - How do I know if I need to report?

SFTR - How do I know if I need to report?

Learn if you need to report under SFTR - with help from UnaVista

SFTR: How do I know if I need to report?  

SFTR is a new European reporting regulation that is due to go live this year, with a phased implementation approach.

If your firm’s transactions fall under SFTR, then you’ll need to ensure you are ready to report at the correct go-live phase or risk sanctions by the regulator.

The definition of the SFTs, re-use and the collateral term that is required by ESMA to be reported, remains vague for many market participants.

So, how do you know if you need to report?

Firstly, if you are not trading any SFTs, as defined by SFTR, then you do not have a reporting obligation.  

If you are though, then you should consider the following points:  

Are you an EU firm trading SFTs?

If so, then you will have a transaction reporting obligation under SFTR.

If you’re a non-EU firm trading SFTs, then you might still have an obligation to report. You’ll need to check if you are trading through an EU branch that is committing those transactions to EU books and records. If any of your SFTs are being traded in this way, then you will need to report them.

Is your firm trading SFTs bilaterally?

If so, then you will be mandated to submit transaction reports on all of those trades.

Does your firm clear its SFTs?

If so, then you’ll have both a transaction reporting obligation and an obligation to report the ongoing margin details.

Lastly, if the collateral you trade is available for re-use or has been re-used, then you will need to report the details of this as well.

So, hopefully you now know whether you need to report or not. To help you understand how to prepare your firm for SFTR reporting, this website has a variety of tools and resources that are designed to simplify the preparation and reporting process to ensure that your firm is prepared for SFTR.