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The European Repo and Collateral Council (ERCC) has published an updated edition of the International Capital Market Association’s (ICMA) Recommendations for reporting under SFTR.
Initially published in February 2020, the recommendations aided members to interpret the regulatory reporting framework introduced by the Securities Financing Transactions Regulation (SFTR) and to set out complementary best practice recommendations, which provides additional clarity and addresses ambiguities in the official guidance.
A blackline version of the document has been published alongside the guide itself, which highlights all the changes that have been made compared to the previous public edition.
Alterations to the original version include a growing number of ICMA members, which increased to 615 members across 65 jurisdictions. The document also specifies the ICMA’s priorities including four fixed income market areas: primary, secondary, repo and collateral and sustainable finance.
Among other changes, the document notes the SFTR requirements for entities across the EU and UK to submit daily reports of all securities financing transactions. It adds: “The reporting rules are extremely granular and require the matching of most of the data points between the two sides of the trade. Reporting applies to new trades but also extends to any modification, termination or correction throughout the lifecycle of the transaction, as well as daily reporting of collateral market values, collateral reuse and margins.”
The changes reflect the recent updates to the SFTR validation rules and reporting schemas published by both the European Securities and Markets Authority (ESMA) and the Financial Conduct Authority (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.
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.
The ICMA Recommendations are supplemented by other best practice documents available to ICMA members, which include a collection of nearly 50 SFTR sample reports and an overview of repo life-cycle event reporting, as well as ICMA’s SFTR Quick Guide.
