We were delighted to attend the Regis-TR SFTR workshop in Frankfurt yesterday. Here’s a quick summary of the key insights we picked up:
- Data sourcing was perhaps seen as the greatest challenge, with c.40% of reportable fields not readily available from risk management and trading systems
- It is a significant logistical challenge to obtain data from so many sources (siloed businesses acting independently, tri-party agents, agent lenders, CSDs, legal and reference data hubs etc)
- Realisation that reporting hard-to-obtain data from such a large and disparate range of sources is an inherently risky business necessitating a rigorous controls environment (something Kaizen can help with)
- Education is key, recent MiFID II experience and industry discussions indicate that many eligible reporting parties are thought to be blissfully unaware of their obligations under SFTR
- Pairing and matching obligations at trade repositories mean that firms need to become better at communicating with their counterparties to reap the benefits of a greater level of standardisation and operational efficiency while becoming ever more regulatory compliant.
For a consultation on your SFTR reporting preparation, please contact us.