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Early adopters of EquiLend’s securities financing product suite can receive a free unique trade identifier (UTI) generation service for the first year of trading for all loans under the Securities Financing Transactions Regulation (SFTR).
Market participants who sign up before 31 March will receive the incentive for all loans, which extends to a 50 percent discount for the second year and 25 percent discount for the third year of trading from when SFTR is expected to go live in Q2 2019.
EquiLend’s UTI service will typically cost $1 per trade.
A $1 per UTI charge will apply for all borrows processed across EquiLend, capped at $250,000 annually. EquiLend expects many large market participants to hit the cap.
The cap will be fixed for two years for those early adopters.
As part of its SFTR solution, EquiLend partnered with Trax in September 2017 to tackle the reporting requirements with a full front-to-back solution for mutual clients.
EquiLend will link its trading and post-trade platform to the Trax system to provide client trading and life cycle event information, while Trax will provide EquiLend clients with data enrichment, reporting services and access to multiple trade repositories.
Trax’s cross-asset class regulatory reporting technology and repo trade confirmation capabilities promises to enable firms to enrich, validate and report eligible SFTR transactions in near real-time.
Meanwhile, EquiLend captures many key elements required for SFTR reporting at point of trade, including UTIs, transaction timestamps and lifecycle events.
SFTR’s final standards are widely expected to be verified by the European Commission in the second quarter this year, meaning the requirements will likely come into effect 12 months after that date.
Commenting on the new fee policy, an EquiLend spokesperson said: "We have drawn on experiences under previous regulatory requirements, notably the European Market Infrastructure Regulation."
"We recognised the need for a robust, consistent, scalable process for the provision and communication of UTIs as the foundation of a successful SFTR implementation."
On the importance managing regulatory compliance fees, the spokesperson said: "Furthermore, firms are looking to maximise the ancillary benefits of whatever SFTR solution they opt for, including leveraging the increased availability of data to inform trading decisions and through the maximisation of operational efficiency."
