T vs T+1 Reconciliations Issues

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Status: For Review, Last Updated: 31/08/2023

Question:
Validation field(s) in scope – 1.01

Securities Lending participants rely on a variety of underlying platforms to maintain their SFTR activities. These many platforms present a significant diversity in processing abilities and mechanisms and, as it relates to SFTR reporting obligations, the timing of necessary output. As a result, TR submissions may arrive either on T+0 or T+1.  This creates a challenge regarding reconciliation of SFTR data within Trade Repository network.

From a practical perspective, changes to an entire operating model represent a significant development and therefore an ongoing challenge.

Best Practice:
ISLA members propose that:

•A cost-benefit analysis be undertaken to mandate the reporting of the trade activity to either T+0 or T+1. This guidance, to either of the two options will trigger the necessary development in technical reporting architecture. However, either option will undoubtedly incur high development costs.

•A second more pragmatic approach would be the inclusion of Event-Date of SFTs in the reconciliation output so that the reporting firms and TRs can easily prioritise the breaks to be investigated. This second option provides both the practical and pragmatic resolution to reconciliation breaks. (SFTR-448)