IHS Markit has signed up nine major financial institutions including Goldman Sachs, Barclays and BAML, to its technology design team for Securities Financing Transaction Regulation (SFTR) reporting.
The banks which also include ABN AMRO, Banco Santander and ING, will collaborate with IHS Markit and Pirum Systems to develop technology for the incoming regulation.
Transaction reporting requirements under Article 4 are expected to begin in Q1 2020, whereby market infrastructures, funds and non-financial institutions will then be subject to the rules at three month intervals, respectively, following the initial date of implementation.
The rules enforce that all securities financing transactions to be reported to a trade repository.
The purpose of SFTR is to provide greater transparency on cross-asset class lending, borrowing, repurchase agreements and sale/buy-back agreements among counterparties in the EU.
Market participants active in repo and securities lending markets have not had to comply with reporting requirements before when engaging in these activities. SFTR will contain an estimated 150 reporting fields to fill in, and there will be a need for unique transaction identifiers (UTI) along with dual-sided reporting.
“With significant engagement from more than 40 industry leaders, we are confident that we are developing a comprehensive, universal SFTR reporting solution that will streamline compliance requirements for the full range of firms active in the securities lending, repo and prime brokerage markets,” said Pierre Khemdoudi, managing director and global co-head of equities, data and analytics at IHS Markit.