UTIs

Post Brexit UTI Exchange

Status: Best Practice Finalised, Last Updated: 26/04/2021

Question:
When the Brexit transition period ends on 31 December 2021 there will no longer be a regulatory requirement for UTI exchange between firms where one party is reporting under UK SFTR and the other is reporting under EU SFTR. How should firms approach UTI sharing in this scenario?

Best Practice:
ISLA recommends that the processes already in place to exchange UTIs should continue when the regulatory requirement has ceased after the Brexit transition. However, if there are business reasons for changing current structures then these should be bilaterally agreed with individual counterparties in line with ESMA's UTI waterfall.

For further information on reporting requirements post-Brexit transition, please click here. (SFTR-442)

Minimum Data Fields for UTI Sharing

Status: Best Practice Finalised, Last Updated: 26/04/2021

Question:
The ISLA SFTR Working Group agreed that a standard file format is required for the passing of loan data and UTI's from the UTI generating party to the counterparty. The standard format would have two possible uses:

1) Enable vendors to pass the required UTI allocated trade information between each other where counterparties do not utilise the same service.

2) Enable firms which do not use any vendor service to have a simple file format to enable them to share the required UTI trade allocation data.

Best Practice:
The standard file layout can be found here under the best practice area. This document includes both list of field names and an xml schema example. (SFTR-240)

Process for UTI Communication Following Internal Return and Rebook

Status: Best Practice Finalised, Last Updated: 10/08/2021

Question:
When a new loan is booked it may generate a UTI which is then shared with the other counterpart. If one party then rebooks the trade, for example to remediate internal system issues, the associated UTI may be lost or regenerated. How should that be managed to avoid trades becoming unpaired at the TR?

Best Practice:
In this scenario, communication should be made with your counterparty confirming the updated UTI, otherwise there will be a mismatch at the TR. Both reports will be acknowledged with different UTIs, but will never match due to the trade pairing process requiring a matching UTI. (SFTR-184)