SFTR Reporting

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Since 13 July 2020, investment firms have been required to report Securities Financing Transactions (SFTs) to an authorised Trade Repository (TR) under Article 4 of the Securities Financing Transactions Regulation (SFTR). Due to Brexit, the EU regulations have been onshored as UK SFTR under the European Union (Withdrawal) Act 2018. On this page, SFTR refers to both EU and UK SFTR unless otherwise specified.

The scope of SFTR reporting includes:

  • a repurchase transaction (REPO);
  • securities or commodities lending and borrowing;
  • a buy-sell back transaction or sell-buy back transaction; and
  • a margin lending transaction.

Who has reporting obligations?

EU SFTRUK SFTR
Both financial counterparties and non-financial counterparties (excluding a small non-financial counterparty (NFC-)) have reporting obligations, which cover the following:

1. EU based entities including all its branches, irrespective of where they are located; and
2. non-EU entities where the SFT is concluded by an EU based branch.

Reporting obligations for non-financial counterparties (except NFC-) commenced on 11 January 2021. See below the mandatory reporting obligations for NFC-s.*
Financial counterparties which cover the following:

1. all UK based entities; and
2. third country branches of UK based entities

have SFTR reporting obligations.

Non-financial counterparties don’t have reporting obligations.

What to report and to whom?

SFTR reporting requires the following information to be included:

  • counterparty data, including Legal Entity Identifiers (LEIs);
  • loan and collateral data, including Unique Transaction Identifiers (UTIs);
  • margin data; and
  • reuse information.

Reports are to be submitted to an authorised Trade Repository (TRs) under SFTR.

Note DTCC is presently the only authorised TR under UK SFTR.

When do reports have to be made?

Reports are required to be submitted to an authorised TR by no later than one working day after the day the SFT has been entered into (T+1).

For transactions that were entered into on or before the reporting start date, they must be reported if they either:

  • have a remaining maturity exceeding 180 days after the reporting start date; or
  • have an open maturity and actually remain outstanding for 180 days after the reporting start date. In this case, the transactions must be reported within 190 days of the reporting start date.

Mandatory delegated reporting under EU SFTR

If a transaction is entered between a financial counterparty and a NFC-, the financial counterparty is required to report for both sides.

*A NFC- means a non-financial counterparty which does not exceed the limits of at least 2 of the 3 following criteria:

  • balance sheet total – EUR 20,000,000
  • net turnover – EUR 40,000,000
  • average number of employees during the financial year is over 250

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Further Information

As a delegated reporting service provider, TRAction is asked a lot of questions regarding EMIRMiFIR and SFTR reporting. That’s why our team has put together some of our most frequently asked questions, so that you can learn how to seamlessly report transactions under multiple regimes. Read more.

While EMIR and MiFIR trade and transaction reporting rules allow reporting entities to delegate their reporting obligations to a third party, they remain ultimately responsible for ensuring the details of their transactions are reported correctly and accurately under Art 9(1) of EMIR & Art 26(7) of MiFIR. Read more.

We all know that meeting all the requisite trade/transaction reporting obligations for EMIRMiFID II/MiFIR and SFTR can pose a considerable cost to an investment firm. While the regulatory burden is not going to disappear, it can be minimised by outsourcing and choosing the most cost-effective and efficient option for you. Read more.

The core trade/transaction reporting obligations under EMIR/MiFIR/SFTR and UK EMIR/MiFIR/SFTR are fundamentally the same. However, there are some changes in the scope of reporting after Brexit depending on the locations of investment firms, nationality of clients, and jurisdictions of Trade Repositories (TRs) or Approved Reporting Mechanism (ARMs). Read more.

Want to know why over 400 firms report their trades through TRAction?

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