Backloading Requirements

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

Question:
Article 4(1) of the https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015R2365&from=EN" target="_blank">Delegated Regulations for SFTR stated the requirement to backload SFTs that were still outstanding after the go-live of SFTR reporting. Following the delay to the initial go-live of SFTR, what are firms requirements for backloading transactions?

Best Practice:
On 19 March 2020, the European Markets and Securities Authority (ESMA) issued a statement that delayed the phase 1 implementation of SFTR. It accomplished this by expecting national competent authorities (NCAs) not to prioritise supervisory actions towards counterparties until July 2020 (phase 2 SFTR). This statement can be found here.

That statement has now been clarified further (ESMA revised statement 26 March 2020), specifically to address backloading, which is an SFTR requirement to capture data not required to be reported on go-live date. This statement can be found here.

ISLA's understanding from ESMA's statement is that all backloading will not be prioritised for all phases of SFTR, effectively allowing all firms to no longer consider backloading as a requirement. (SFTR-155)