Trading Venue allocations booked under a non-disclosed Agent Lender model

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Status: For Review, Last Updated: 28/06/2022

Question:
Validation field(s) in scope – 2.08

In July 2020 ISLA consulted with ESMA regarding a set of questions intended to create further clarity on the subject of: “Whether allocations booked under a non-disclosed Agent Lender model should ever be reported as concluded on a Trading Venue in Field 2.08”.

In response to the consultation letter ESMA requested further information and clarity on those questions. Please see Annex#4 Correspondence regarding Trading Venue.

This issue relates to pooled transactions entered into by an agent lender on a trading platform and therefore the population of the Trading Venue field.

Using the example below, the trade of 100 shares on the Trading Venue is not reported under SFTR, but rather the allocations (50,20,30).  When reporting those three trades, some of our members populate the Trade Venue with “XXXX” as those child trades could be considered as not traded but rather allocated after the trade initiation. This is particularly true when substitutions occur after the initial pool trade.

Best Practice:
ISLA members propose that:

•ESMA can confirm that trades entered into by an agent lender, where the ultimate lender is not disclosed at point of initial trade, be reported as “XXXX” in place of a Trading Venue MIC code in field 2.08. (SFTR-813)