Nick Stafford | published on 4th August 2017
SFTR Scenarios & Key Considerations
Following extensive review of the SBL / Repo Landscape – including the actors involved, information flows and functional requirements, we have identified four SFTR reporting scenarios that firms will need to consider:
Some firms will be looking to fully delegate the reporting function, including data enrichment before sending data to a Trade Repository. Others will have the capability to enrich some, if not all data in-house, and can choose to report themselves or delegate.
Firms that have central reporting capabilities will be looking to leverage this function, either centrally, or in their business line. In which case, they may enrich themselves or outsource but keep the reporting function in-house. This has the benefit of creating centralised sources of data that can be used for both the firms regulatory reporting, but also to be fed in to business process – for example, trading decisions, without having to repatriate internally first.
Depending on the data enrichment required and if you are looking to delegate reporting or not, along with your role in the transaction, you will need to consider various factors in developing the SFTR reporting capability. Clearly there are pros and cons for each approach, not least the time, complexity and controls required in order to achieve the reporting deadlines each day.
Some questions to ask are:
- What products do you trade, and what businesses is this done from?
- What are your current reporting capabilities and firm requirements for other product regulatory reporting?
- What data are you missing, how are you planning to enrich this? Will you look to use a third-party to provide this service?
- Do you plan to report directly, or delegate this?
- How will enrichment and delegated reporting affect the timings of your trade reporting requirement?
- What is the impact of the life-cycle event and collateral management on your planned approach?
- What will be the impact on your target operating model, and what changes do you need to implement to ensure compliance to the regulations?