On March 26, the UK’s Financial Conduct Authority (FCA) updated its webpage on the Securities Financing Transactions Regulation (SFTR) to confirm its approach to supervisory reporting in the light of COVID-19.

The FCA acknowledged the European Securities and Markets Authority’s (ESMA) updated statement of March 26, 2020, which addressed the challenges firms are facing to meet their reporting requirements under the SFTR before April 13, 2020. ESMA set out the following provisions in its statement:

  • EU financial regulators (EUFRs) should not prioritize supervisory activity towards firms’ compliance with the SFTR reporting obligation between April 13, 2020 and July 13, 2020;
  • EU financial regulators (EUFRs) should not prioritize supervisory activity towards firms reporting securities financing transactions (SFTs) under the Markets in Financial Instruments Regulation (MiFIR) when their counterparty is a member of the European System of Central Banks; and
  • ESMA confirmed it will not prioritize trade repository registration ahead of April 13, 2020, but it will ensure TRs are registered before July 13, 2020.

The FCA supports the above statements made by ESMA and wishes firms to focus their resources on critical functions during this period. In addition, the FCA will not prioritize supervision relating to the reporting of SFTs for firms to which the backloading requirement specified in Article 4(1)(a) of SFTR applies.

The updated FCA webpage is available here.

The ESMA statement is available here.