Challenges connected with SFTR reporting

Challenges connected with SFTR reporting

By Christian Thygesen | Regulatory Reporting Specialist | July 19th, 2022

REGTECH DATAHUB plays a key role in securing client’s SFTR back-reporting

In a recent case, a customer was struggling with SFTR back-reporting. Poor data quality and coverage were central to the customer’s challenges. In short, the lack of correct data in particular with regards to collateral meant that it took the customer a day to handle the rejects from the trade repository from a trade day’s worth of reporting, meaning that they would never be able to complete back-reporting.

The data issue could be split in two separate problems:

First, the customer’s current data provider was generally not able to provide all data needed for collateral reporting to be complete and correct in particular when it came to issuer LEI, CFI and collateral quality.

Second, a more specific problem was that for some bonds that had historically been used as collateral but had expired before the beginning of back-reporting, the data provider had no data at all.

The RTDH has stored all data that has been available from public sources at some point since Jan 1st 2018. This implies that the RTDH should be able to fulfill all data needs relating to bonds that have been accessible in ESMA’s various databases since before the launch of SFTR. (For EMIR – having launched in early 2014 – we may not be able to support all historic data needs. However, over the past couple of years, we have not faced a customer with EMIR back-reporting issues relating to 2017 or earlier).

It also means that we have a perfect record of any instrument having been issued by or traded on an EU/EAC/UK entity, and a pretty good record of any instrument having been reported as collateral.

The data quality & coverage of the RTDH was certainly good enough to reduce the number of rejections of the customer so significantly that they quickly managed to catch up with their SFTR back-reporting.

Product Owner Kenneth Brandborg, comments in regards to the enhancement of REGTECHDATAHUB’s capabilities: “It’s our number one priority to deliver customer value by solving specific complications in the everyday regulatory reporting.”