Sunday, September 26 2021

Majority of companies are moving towards consolidating regulatory reporting requirements under one platform

The majority of SFTR survey respondents (banks, asset managers, hedge funds and brokers) plan to consolidate their various regulatory reporting requirements under one platform in the near future.

Following the implementation of the Securities Financing Transactions Regulation (SFTR) in July 2020, Pirum and IHS Markit’s SFTR post-implementation industry survey recorded more than 70% of respondents stating that they aimed to consolidate their various regulatory reporting requirements.

The benefits of outsourcing regulatory reporting to third parties, in terms of speed and convenience of deployment, as well as the benefits of a collaborative approach to the implementation and interpretation of the new rules, were clear, according to investigation.

But for “companies that have already invested heavily in internal technology to meet regulatory reporting needs, it may be more difficult to make the decision to abandon them in favor of a third party,” the survey said.

Other key considerations for companies were data harmonization and improving overall data quality, where the survey indicates that “the market as a whole needs to engage in order to find a solution”.

He also finds that companies must work to improve the quality and accuracy of their reports, especially on warranty data, to achieve regulators’ ultimate goals of increased transparency.

Importantly, the report states that while fines for non-compliance or inaccuracy of SFTR have not been imposed to date, regulators still expect affected companies to ensure that they report accurately and quickly. .

UTI matching was probably the main challenge for SFTR, according to respondents. However, one year after SFTR went live, 80% of companies report having been able to complete all or most of their matching. In contrast, the survey indicates that only 28% of respondents are satisfied with their UTI pairing for EMIR several years after implementation, which the report says is “a testament to the work the market has done.”

On a positive note, regulators have learned lessons from previous regimes such as EMIR and MiFIR, and SFTR appears likely to be the model on which future regulatory reporting requirements are based, according to the report.

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