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The European Commission today announced that they have adopted a package of new measures under SFTR. Commenting on these measures, Val Wotton, Managing Director, Product Development & Strategy, Derivatives & Collateral Management, DTCC, said:
"The approval of the technical standards for the reporting rules of SFTR fires the starting gun on the countdown to the implementation of this new regulation which we expect to take place in just over a year's time.
In order to be ready in time, the securities financing industry has a significant amount of work to do, particularly around data availability and workflows. We know that large broker dealers and agent lenders have kicked off their preparations, however many of the smaller banks and buy-side firms have not yet initiated their response to the regulation and we would recommend that they begin these preparations as soon as possible.
Further, as market participants start to prepare, we urge them to take a more strategic approach to addressing the SFTR requirements, rather than viewing them as a compliance exercise. In doing so, they will have an opportunity to gain wider advantages such as increased levels of pre-trade matching, reducing trade fails and creating greater collateral efficiencies, which will result in significant benefits such as balance sheet optimisation."
