Shearman & Sterling LLP | FinReg | COVID-19: EU Regulatory Forbearance for Banks and Investment Firms for Reporting Securities Financing Transactions
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  • COVID-19: EU Regulatory Forbearance for Banks and Investment Firms for Reporting Securities Financing Transactions
    03/26/2020
    UPDATE: Further to its statement published on March 18, 2020, the European Securities and Markets Authority has published a clarifying statement to confirm that the regulatory forbearance granted for banks and investment firms subject to the upcoming reporting obligation under the Securities Financing Transaction Regulation also applies to securities financing transactions subject to the backloading requirement.

    ESMA published its initial public statement on steps it is taking to mitigate the impact of the coronavirus (COVID-19) on the EU financial markets. ESMA is granting regulatory forbearance for banks and investment firms subject to the upcoming reporting obligation under the SFTR. Banks and investment banks were due to start reporting SFTs from April 13, 2020. EU banks and investment firms have been rolling out necessary diligence to categorize their clients and confidentiality waivers ahead of the launch, as well as installing new IT systems to report. ESMA's regulatory forbearance delays the reporting obligation for banks and investment firms from April 13, 2020 to July 13, 2020, which is the date from which CCPs and central securities depositories must begin reporting SFTs. Other Financial Counterparties must report from October 12, 2020 and Non-Financial Counterparties from January 11, 2021.

    The U.K. Financial Conduct Authority has confirmed that it will not prioritize supervision of the reporting requirements until at least July 13, 2020 and will not require firms to back report any SFTs concluded between April 13, 2020 and July 13, 2020.

    View ESMA's updated statement.

    View the FCA's statement.

    You may like to see further details of ESMA's regulatory forbearance in our related client note, COVID-19: ESMA Delays New Reporting Regime for Repos, Securities Lending and Buy Backs for EU Banks and Investment Firms.

    Details of other regulatory responses to COVID-19 are available at our COVID-19 Research Center.

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    TOPICS: COVID-19Securities