40% of SFTR data is missing
Finextra interview: Val Wotton, DTCC and Andrew Kouloumbrides, Xceptor
WHAT ARE THE DATA AND OPERATIONAL CHALLENGES OF SFTR REPORTING FOR END USERS?
VW: 153 data elements in total, very similar to EMIR, but far more than MiFID II which is in the range of 70-80 fields. 40% of fields are not readily available, or captured within firms systems today. From an operational perspective, 60% of processes from post-trade through to reporting are going to be impacted.
WHAT CAN FIRMS DO IN PREPARATION FOR UPCOMING COMPLIANCE OBLIGATIONS?
VW: An audit of data elements to build a picture of gaps and where existing data is held. Is it inside the firms systems? Or is it external? If so, how will it be sourced? New requirements dictate that firms will have to match on a UTI. How will this data be stored? From a data transformation perspective, for the first time, inbound data must be submitted in ISO 20022 to the trade repository. So not only is data missing, it must also be submitted in the ISO standard to be compliant.
WHAT ARE THE USPS OF THE XCEPTOR Regulatory reporting SOLUTION?
AK: It's all around the data. The Xceptor regulatory reporting solution has the ability to capture data in any source and any format. Clients will be able to extract data from existing systems and pass to the service. The ability to enrich data. As Val says, 40% of the data is not there. The Xceptor platform enables firms to get reference data such as LEIs. The ability to transform data to make sure that it is presented in the correct format in terms of the 153 reporting fields.
IMPACT OF THE SOLUTION FROM AN OPERATIONAL PERSPECTIVE?
VW: Today the industry looks at position and not necessarily at the individual trade components. These will now need to be reported, and as Andrew says, this will heavily impact volumes. The DTCC repository has a set of validations that firms have to comply with for a trade to be taken into the repository. Using Xceptor, firms can proactively monitor what is going to happen when they send a message to the repository.
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