2
THE GTR SOLUTIONWith Europe’s Securities Financing Transactions
Regulation (SFTR) due to take effect in 2019,
DTCC’s Global Trade Repository (GTR), the
industry leader in trade reporting, will provide a
solution for firms’ SFTR reporting requirements
by extending its coverage to securities financing
transactions (SFTs).
WHAT IS SFTR?
SFTR is a European mandate that regulates SFTs with the aim of increasing transparency around and monitoring systemic risks arising from securities lending activities. SFTs are transactions that use securities to borrow cash or vice versa.
SFTR requires firms to report the details of their SFTs to a trade repository (TR). SFTs covered by SFTR include repurchase agreements (repos) and reverse repos; sell/buy-back and buy/sell-back transactions; securities and commodities lending and borrowing; and margin lending and borrowing.
European legislators developed SFTR in response to the global Financial Stability Board’s (FSB) objective of strengthening oversight and regulation of shadow banking. Legislators in other regions are expected to follow suit. The European Securities and Markets Authority (ESMA) is charged with implementing SFTR’s rules and technical standards.
3
WHICH FIRMS ARE IN SCOPE?
EXAMPLES OF FIRMS THAT NEED TO REPORT
TRANSACTIONS COVERED BY SFTR
Both Financial Counterparties and Non-Financial Counterparties
EU-based entities including their Non EU-based branches
Non EU-based entities where the SFT is concluded by an EU-based branch
Investment firms
Repo & reverse repo
Insurance companies
Sell/buy-back & buy/sell-back
Pension funds
Securities & commodities, lending & borrowing
Central Securities Depositories (CSDs)
Margin lending & borrowing
Central counterparties (CCPs) Non–financial companies
Credit institutions UCITS management companies and AlternativeInvestment Fund Managers (AIFMs)
4
WHEN WILL REPORTING START?Reporting obligations under SFTR will be
phased in, and depend on the counterparty
type. It is currently expected that the reporting
obligation for investment firms and credit
REQUIREMENTS AT A GLANCE
institutions will begin in Q3 2019, subject
to approval of the technical standards by
the European Commission and European
Parliament.
JAN 2016SFTR came in to force
SFTR is structurally similar to EMIR:
Q2 2018SFTR Regulatory Technical standards (RTS) excepted to be approved
Q4 2019Reporting requirements for CCPs and CSDs
Q3 2019Reporting requirement apply for investment firms and credit institutions
Q1 2020Reporting requirement apply for UCITS, AIFs & pension funds
• Similar to the requirements of European
Market Infrastructure Regulation (EMIR)
(counterparty data, trade data)
• Parties must report details of conclusion,
modification & termination of any SFT to a
TR by no later than T+1
• Parties must also report associated
collateral, as well as daily valuations
• Reporting obligation is dual-sided. Firms
may delegate the reporting, but not the
obligation
• Firms must ensure the completeness,
timeliness and accuracy of reporting. There
is a regulatory expectation that reports will
be paired and matched, with very strict / no
tolerance levels
• Backloading of open trades/positions to the
repository is required
• Reporting counterparties (CPs) must
identify themselves using legal entity
identifier (LEI)
• Unlike EMIR, financial CP is required to
report trades between financial CPs & small
non-financial CPs for both sides. ‘Small
non-financial’ is a new classification
• Firms must submit in ISO 20022 XML
format
Q2 2020Reporting for non-financial counterparties begin to apply
5
COMPARISON OF EMIR, SFTRAND MIFIR REPORTINGEMIR and SFTR regulations are aligned and have similar requirements
REPORTING TYPE Trade/Position Trade/Position Transaction
NUMBER OF FIELDS 129 153 65
REGULATORY OBJECTIVE Systemic Risk Systemic Risk Market Abuse /Market Surveillance
LEGAL FORM European Regulation European Regulation but SFT reporting expected to be adopted globally
European Regulation but also subject to varying national implementationof the Directive
UTI REQUIRED Yes Yes No
INTER TR RECONCILIATION
Yes NoYes
YesDAILY COLLATERAL* REPORTING
Yes No
YesLIFECYCLE REPORTING
Yes Partial (notional changes)
* If modified from previous day.
ACTION TYPE REPORTING
Yes No
YesDAILY VALUATION* REPORTING
Yes No
SFTR (proposed) MIFIREMIR
Yes
6
USING GTR FOR SFTR COMPLIANCEGTR functionality enables SFTR reporting and data access
Benefits include:
• A user-friendly scheduler to manage and
create bespoke recurrent reports
• Control over user data access and self-
service capabilities
• Ability to query submission and trade data
quickly
• Suite of Management Information Systems
(MIS) including accepted and rejected trade
details
7
GTR TRADE FLOWWhat we will offer:
• Reuse of existing connectivity
• ISO 20022 XML ingestion
• Support for delegated reporting
• 6 months of User Acceptance Testing (UAT)
prior to the go-live regulation date
• Availability of simulator tools for testing
prior to the UAT date
• Management of reporting through a user
portal
Ingestion
Reconciliation
Validation
Record Keeping
Data Access
Public Reporting
Participant Reporting
Regulatory Reporting
8
AUSTRALIAAustralian Securities & Investments Commision
(ASIC)
Live
HONG KONGHong Kong Monetary
Authority (HKMA)DTCC acting as an agent
for HKMA
LiveLive
CANADA
LiveLive
OTC Derivatives Regulators’ Forum (ODRF) reporting
Public Dissemination
SINGAPOREMonetary Authority
of Singapore(MAS)
Live
JAPANJapan FinancialServices Agency
(JFSA)
Live
USCommodity
Futures Trading
Commission(CFTC)
Live
USSecurities
and Exchange
Commission (SEC)
Pending go-live2019
SWITZERLANDFinancial Market
Supervisory Authority (FINMA)
Pending application
2018
EUROPEEuropean Securities &
Markets Authority(ESMA)
Live
Parties to thetrade (brokers,
banks, asset managers,
corporates, etc.)
Electronic execution platforms
[exchanges, SEFs, OTFs,
DCMs]
CCPs and DCOs Confirmation Providers
Intermediaries (Interdealer
brokers)
Custodian and asset servicers
Any other middleware providers
GTR
GTR REPORTING MODELWe work with our client community and with
regulators to build the most appropriate models
to comply with regulation and user governance
requirements. The robustness and safety of our
infrastructure protects client data and respects
the confidentiality of that data.
Our utility, non-commercial model works for the
interests of users and the market as a whole.
9
GTR IN EUROPE: KEY NUMBERS
42
3,500
30M
500M
Regulators
Clients
New transactions weekly
Messages per month
Trade Repository 1 DDRL Trade Repository 2
Millions9,0008,0007,0006,0005,0004,0003,0002,0001,000
2017201620152014
GTR Europe (DDRL)The biggest trade repository in terms of reports collected from the client
ESMA calculations based on weekly statistics provided by the trade repository - 11 January 2018
Trade Repository 3 Trade Repository 4 Trade Repository 5
10
In addition to GTR, DTCC offers other key of
post-trade solutions to help improve the quality
of data required by SFTR.
LEI reportingThe GMEI utility, DTCC's LEI solution, provides
a single, universal, standardized LEI to any
eligible entity, thereby helping firms adhere to
their SFTR reporting requirements.
Trade matchingDTCC's CTMTM platform allows repo clients to
DTCC'S POST-TRADE PROCESSING SOLUTIONS FOR SFTR COMPLIANCE
match buy/sell-back and single security bilateral
repo transactions.
CTM enables the enrichment of Standing
Settlement Instructions for repo transactions via
DTCC's ALERT® service.
To learn more about how DTCC can help firms
manage the post-trade processing, please visit
www.dtcc.com/sftr.
PRE USER ACCEPTANCE TESTING (UAT) PHASE TO PRODUCTION
Pre UAT
• Access to community industry working groups
• Access to online documents and videos
• Webinars
• Message specification and user interface tools
UAT
• Access to the simulator tool
• Global UAT support
• Testing scripts
• UAT management information systems
Production
• Global support
• Post production webinars
• Industry webinars
• Access to our Regulatory Relations team
Pre User Acceptance Testing (UAT) phase to Production
11
6,000 open positions per weekclients 40M
100,000 individual entities60 regulators accessing our data
WHY DTCC?DTCC GTR is the industry leader in trade
reporting for derivatives, serving the data- and
risk-management needs of more than 6,000
clients and 60 regulators across the globe
through its stable, reliable infrastructure.
In 2017, GTR tracked over 40 million open
positions per week globally, processing over 1
billion messages monthly on some 100,000
individual entities.
DTCC is a true market utility. As a user-
owned and -governed trade repository GTR
upholds high standards of client service
and collaboration, partnering with clients to
enhance and expand functionality in response
to changing regulatory mandates. GTR intends
to extend this service for SFTR to continue
to provide clients an efficient, class-leading
service designed to assist clients throughout
the reporting lifecycle. GTR is the only trade
repository currently positioned to expand its
SFT offering globally while other jurisdictions
come into force, reducing implementation costs
for firms operating in multi jurisdictions. GTR
Europe is divided almost equally between the
UK and the rest of the EU and is committed
to providing trade repository services in both
locations post Brexit.
For more information on DTCC and our products and services, visit DTCC.com or [email protected]
This document is for information purposes only, and does not constitute legal advice. Readers should consult their legal advisors for legal advice in connection with the matters covered in this document. The services described are governed by applicable rules, procedures, and service guides for relevant DTCC subsidiaries, which contain the full terms, conditions, and limitations applicable to the services. ‘GTR’ and ‘Global Trade Repository’ are brands under which, through its subsidiaries, DTCC provides regulatory reporting services for derivative transactions across multiple jurisdictions (the ‘GTR Services’). Each DTCC subsidiary offering GTR Services is a legally separate and independent entity. Some GTR Services may only be available from certain DTCC subsidiaries.
With over 45 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From operating facilities, data centers, and offices in 16 countries, DTCC, through its
subsidiaries, automates, centralizes, and standardizes the post-trade processing of financial transactions, mitigating risk, increasing transparency, and driving efficiency for thousands of broker/dealers, custodian banks, and asset managers worldwide. Industry owned and governed, the firm simplifies the complexities of clearing,
settlement, asset servicing, data management, and information services across asset classes, bringing increased security and soundness to the financial markets.
@the_dtccFollow us on
linkedIn.com/company/dtccFind us on
facebook.com/thedtccCheck us out on
youtube.com/c/thedtcc1973Connect with us on