SFTS: SFTR compliance concerns will escalate when fines are issued
04 November 2021 UK
Image: Sikov/stock.adobe.com
Compliance concerns will escalate considerably once the first fine is issued, says one panellist at this year鈥檚 Securities 麻豆影视传媒 Technology Symposium.
During the events first panel, SFTR and Now, issues with the reconciliation and work the industry is doing to drive best practices, in regards to Securities 麻豆影视传媒 Transactions Regulation (SFTR), was discussed.
Panellists included Tomas Bochicchio, SFTR director of product management at DTCC;
Adrian Dale, head of regulation and market practice at ISLA; Jonathan Lee, senior regulatory reporting specialist at Kaizen Reporting; and Joanne Salkeld, SFTR product manager at MarketAxess.
Speaking on these issues, one panellist says: 鈥淭he validation rules still remain quite loose and yet they鈥檙e viewed by the regulators as a reliable benchmark. Unfortunately, reporting a valid transaction or a valid action is certainly no guarantee of the accuracy of that report. The vast majority of the reports that we test are valid, they pass the validation rules of the trade repository, but they are wrong in one or more of the details that are reported.
鈥淒ata quality is absolutely key and absolutely fundamental to the regulators being able to use this data for the intended purpose.鈥�
David Lewis, senior director of securities finance at FIS Global, who led the discussion, turned to another panellist for a response to this compliance concern.
That panellist says: 鈥淚 don鈥檛 think we鈥檙e there quite yet. If someone鈥檚 done something wrong, you don鈥檛 immediately jump in with fines all over the place like some sort of crazed gunman.鈥� He goes on to explain the 鈥渕uch more mature鈥� approach that would take place in this situation, suggesting if one firm is reporting incorrectly then there is a possibility that 鈥渁 bunch of other firms are doing something incorrectly鈥�.
Supporting the original point of concern, another panellist adds: 鈥淵ou can pass the tests and you can send valid data in but if you鈥檙e not measuring something properly, you鈥檙e not going to be able to manage it properly. That鈥檚 a big concern I think.鈥�
It was concluded that as a general rule, in the beginning of regulation, data quality is going to be lacking and over time we鈥檒l see that data quality being improved, more regulations will come out and validation rules will change.
During the events first panel, SFTR and Now, issues with the reconciliation and work the industry is doing to drive best practices, in regards to Securities 麻豆影视传媒 Transactions Regulation (SFTR), was discussed.
Panellists included Tomas Bochicchio, SFTR director of product management at DTCC;
Adrian Dale, head of regulation and market practice at ISLA; Jonathan Lee, senior regulatory reporting specialist at Kaizen Reporting; and Joanne Salkeld, SFTR product manager at MarketAxess.
Speaking on these issues, one panellist says: 鈥淭he validation rules still remain quite loose and yet they鈥檙e viewed by the regulators as a reliable benchmark. Unfortunately, reporting a valid transaction or a valid action is certainly no guarantee of the accuracy of that report. The vast majority of the reports that we test are valid, they pass the validation rules of the trade repository, but they are wrong in one or more of the details that are reported.
鈥淒ata quality is absolutely key and absolutely fundamental to the regulators being able to use this data for the intended purpose.鈥�
David Lewis, senior director of securities finance at FIS Global, who led the discussion, turned to another panellist for a response to this compliance concern.
That panellist says: 鈥淚 don鈥檛 think we鈥檙e there quite yet. If someone鈥檚 done something wrong, you don鈥檛 immediately jump in with fines all over the place like some sort of crazed gunman.鈥� He goes on to explain the 鈥渕uch more mature鈥� approach that would take place in this situation, suggesting if one firm is reporting incorrectly then there is a possibility that 鈥渁 bunch of other firms are doing something incorrectly鈥�.
Supporting the original point of concern, another panellist adds: 鈥淵ou can pass the tests and you can send valid data in but if you鈥檙e not measuring something properly, you鈥檙e not going to be able to manage it properly. That鈥檚 a big concern I think.鈥�
It was concluded that as a general rule, in the beginning of regulation, data quality is going to be lacking and over time we鈥檒l see that data quality being improved, more regulations will come out and validation rules will change.
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