On Thursday 19 March, the European Securities and Markets Authority (ESMA) announced a postponement of the effective supervision of the application of certain provisions under the Securities Financing Transactions Regulation (SFTR), in particular those on the reporting start date and the registration of trade repositories.
In a public statement, it calls on national authorities “not to prioritise their supervisory actions towards entities subject to Securities Finance Transactions (SFT) reporting obligations as of 13 April 2020 and until 13 July 2020”.
The ESMA states that it is “aware of the pressure on the financial industry to comply with the new regulatory obligations under Regulation SFTR in a situation where it is already facing significant challenges due to the COVID-19 virus and the related actions taken by the different Member States to prevent its contagion”.
The International Securities Lending Association (ISLA) and the International Capital Market Association (IMCA) warned the European authority about this a few days ago. In a letter sent on 16 March to the Chairman of ESMA, the two associations explained how the pandemic and its impact on staff involved in programmes to implement the Regulation SFTR among their members had “critically compromised” their efforts to meet the 11 April deadline for reporting obligations applying to banks and investment firms.
Aware that the situation would deteriorate further in the coming months, ISLA and IMCA urgently requested an extension of the deadline to “an appropriate date that falls well outside the expected critical phase of the pandemic”, namely 11 October 2020, which corresponds to the date of the third reporting phase under Regulation SFTR.
If a formal postponement of the reporting date was not possible, the two associations asked ESMA to at least consider equivalent measures that would ensure that companies would not be expected by national authorities to comply strictly with the reporting obligations of the SFTR Regulation for a certain period of time. And that is what ESMA has chosen to do with this statement.
The ESMA also states that it does not consider it “necessary” to register any trade repository before 13 April 2020. However, these will have to be registered sufficiently in advance for the next reporting phase on 13 July 2020, the ESMA indicated.
See the statement: https://bit.ly/2wn0Elj (Original version in French by Marion Fontana)