Clients of MarketAxess and EquiLend begin SFTR testing

Both companies are looking to get clients ready for SFTR reporting in advance of the 2020 deadline.

By Jonathan Watkins

MarketAxess and EquiLend have begun user acceptance testing (UAT) for the upcoming Securities Financing Transactions Regulation (SFTR) in a bid to identify process gaps and development areas.

Both companies are looking to get clients ready in advance of the 2020 deadline.

The new rules in Europe will require firms to report a total of 155 fields on a T+1 or S+1 basis for their securities lending and repo trades, in a bid to increase transparency into securities financing transactions such as margin lending and repo.

MarketAxess and EquiLend have advised clients to allow at least six months for testing or risk non-compliance and potentially significant fines.

“The SFTR implementation deadline is fast approaching, and as we get closer to it the more complex it’s requirements appear to be,” said Sunil Daswani, head of business development for securities lending at MarketAxess.

“We’re delighted, therefore, to have our key clients already into UAT in a live environment – and we urge the broader universe of asset management and corporates out there to do the same. What we’ve learned from preparations for other regulatory changes, such as MiFIR, is that there is no such thing as being too prepared or going too early.”

The news follows the announcement by Pirum Systems and IHS Markit in June that they had successfully completed a full end-to-end test for Rabobank and its reporting of securities financing transactions (SFT).

The firms also partnered with partnered with consultancy firm Delta Capita to collaborate with a number of banks with the aim to standardise testing for securities finance reporting.

MarketAxess and EquiLend’s announcement also comes a day after European regulators closed their public consultation on draft guidelines for SFTR.