The repo, securities lending and borrowing, and prime brokerage divisions of Citi, Morgan Stanley, RBC, UBS and Vanguard have joined the design partner group for IHS Markit’s Securities Finance Transaction Regulation (SFTR) reporting solution with Pirum Systems.
These firms bring the SFTR design partner group to 32 clients and partners in total, representing industry leaders in repo markets, buy/sell backs, sell/buy backs, securities lending and borrowing, and margin lending.
“With MiFID II in effect, the securities finance industry is preparing for future obligations under SFTR, which for the first time imposes trade reporting requirements on repos and other transactions,” says Ed Marhefka (pictured), managing director and global co-head of Securities Finance at IHS Markit. “Our design partner group brings together global expertise across the full spectrum of securities finance transactions, which will help us deliver the industry’s most robust and efficient SFTR reporting solution.”
SFTR’s complex reporting requirements vary based on location and counterparty type (such as buyside, agent lender, repo dealer or prime broker). The IHS Markit SFTR reporting solution will enable trade reporting to repositories for repo and reverse repo agreements, securities loans and borrows, commodities loans and borrows, prime brokerage margin lending and collateral reuse.
SFTR was enacted by the European Parliament in 2015 to provide greater transparency on cross-asset class lending, borrowing, repurchase agreements and sale/buy-back agreements among counterparties in the EU. The regulation will be phased in through 2019, and additional reconciliation requirements are under consideration for a later date.
In October 2017, IHS Markit announced that BNY Mellon, Brown Brothers Harriman, Deutsche Bank Agency Lending, eSecLending, J.P. Morgan and Rabobank joined as SFTR reporting solution design partners.
To ensure interoperability within the industry ecosystem, IHS Markit is also engaging vendors, trade repositories and agents with approved publication arrangements (APAs) on the design of its SFTR reporting solution.