GTRThe Reporting Solutionfor Securities Financing Transactions

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THE GTR SOLUTIONWith Europe’s Securities Financing Transactions

Regulation (SFTR) due to take effect in 2019,

DTCC’s Global Trade Repository (GTR), the

industry leader in trade reporting, will provide a

solution for firms’ SFTR reporting requirements

by extending its coverage to securities financing

transactions (SFTs).

WHAT IS SFTR?

SFTR is a European mandate that regulates SFTs with the aim of increasing transparency around and monitoring systemic risks arising from securities lending activities. SFTs are transactions that use securities to borrow cash or vice versa.

SFTR requires firms to report the details of their SFTs to a trade repository (TR). SFTs covered by SFTR include repurchase agreements (repos) and reverse repos; sell/buy-back and buy/sell-back transactions; securities and commodities lending and borrowing; and margin lending and borrowing.

European legislators developed SFTR in response to the global Financial Stability Board’s (FSB) objective of strengthening oversight and regulation of shadow banking. Legislators in other regions are expected to follow suit. The European Securities and Markets Authority (ESMA) is charged with implementing SFTR’s rules and technical standards.

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WHICH FIRMS ARE IN SCOPE?

EXAMPLES OF FIRMS THAT NEED TO REPORT

TRANSACTIONS COVERED BY SFTR

Both Financial Counterparties and Non-Financial Counterparties

EU-based entities including their Non EU-based branches

Non EU-based entities where the SFT is concluded by an EU-based branch

Investment firms

Repo & reverse repo

Insurance companies

Sell/buy-back & buy/sell-back

Pension funds

Securities & commodities, lending & borrowing

Central Securities Depositories (CSDs)

Margin lending & borrowing

Central counterparties (CCPs) Non–financial companies

Credit institutions UCITS management companies and AlternativeInvestment Fund Managers (AIFMs)

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WHEN WILL REPORTING START?Reporting obligations under SFTR will be

phased in, and depend on the counterparty

type. It is currently expected that the reporting

obligation for investment firms and credit

REQUIREMENTS AT A GLANCE

institutions will begin in Q3 2019, subject

to approval of the technical standards by

the European Commission and European

Parliament.

JAN 2016SFTR came in to force

SFTR is structurally similar to EMIR:

Q2 2018SFTR Regulatory Technical standards (RTS) excepted to be approved

Q4 2019Reporting requirements for CCPs and CSDs

Q3 2019Reporting requirement apply for investment firms and credit institutions

Q1 2020Reporting requirement apply for UCITS, AIFs & pension funds

• Similar to the requirements of European

Market Infrastructure Regulation (EMIR)

(counterparty data, trade data)

• Parties must report details of conclusion,

modification & termination of any SFT to a

TR by no later than T+1

• Parties must also report associated

collateral, as well as daily valuations

• Reporting obligation is dual-sided. Firms

may delegate the reporting, but not the

obligation

• Firms must ensure the completeness,

timeliness and accuracy of reporting. There

is a regulatory expectation that reports will

be paired and matched, with very strict / no

tolerance levels

• Backloading of open trades/positions to the

repository is required

• Reporting counterparties (CPs) must

identify themselves using legal entity

identifier (LEI)

• Unlike EMIR, financial CP is required to

report trades between financial CPs & small

non-financial CPs for both sides. ‘Small

non-financial’ is a new classification

• Firms must submit in ISO 20022 XML

format

Q2 2020Reporting for non-financial counterparties begin to apply

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COMPARISON OF EMIR, SFTRAND MIFIR REPORTINGEMIR and SFTR regulations are aligned and have similar requirements

REPORTING TYPE Trade/Position Trade/Position Transaction

NUMBER OF FIELDS 129 153 65

REGULATORY OBJECTIVE Systemic Risk Systemic Risk Market Abuse /Market Surveillance

LEGAL FORM European Regulation European Regulation but SFT reporting expected to be adopted globally

European Regulation but also subject to varying national implementationof the Directive

UTI REQUIRED Yes Yes No

INTER TR RECONCILIATION

Yes NoYes

YesDAILY COLLATERAL* REPORTING

Yes No

YesLIFECYCLE REPORTING

Yes Partial (notional changes)

* If modified from previous day.

ACTION TYPE REPORTING

Yes No

YesDAILY VALUATION* REPORTING

Yes No

SFTR (proposed) MIFIREMIR

Yes

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USING GTR FOR SFTR COMPLIANCEGTR functionality enables SFTR reporting and data access

Benefits include:

• A user-friendly scheduler to manage and

create bespoke recurrent reports

• Control over user data access and self-

service capabilities

• Ability to query submission and trade data

quickly

• Suite of Management Information Systems

(MIS) including accepted and rejected trade

details

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GTR TRADE FLOWWhat we will offer:

• Reuse of existing connectivity

• ISO 20022 XML ingestion

• Support for delegated reporting

• 6 months of User Acceptance Testing (UAT)

prior to the go-live regulation date

• Availability of simulator tools for testing

prior to the UAT date

• Management of reporting through a user

portal

Ingestion

Reconciliation

Validation

Record Keeping

Data Access

Public Reporting

Participant Reporting

Regulatory Reporting

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AUSTRALIAAustralian Securities & Investments Commision

(ASIC)

Live

HONG KONGHong Kong Monetary

Authority (HKMA)DTCC acting as an agent

for HKMA

LiveLive

CANADA

LiveLive

OTC Derivatives Regulators’ Forum (ODRF) reporting

Public Dissemination

SINGAPOREMonetary Authority

of Singapore(MAS)

Live

JAPANJapan FinancialServices Agency

(JFSA)

Live

USCommodity

Futures Trading

Commission(CFTC)

Live

USSecurities

and Exchange

Commission (SEC)

Pending go-live2019

SWITZERLANDFinancial Market

Supervisory Authority (FINMA)

Pending application

2018

EUROPEEuropean Securities &

Markets Authority(ESMA)

Live

Parties to thetrade (brokers,

banks, asset managers,

corporates, etc.)

Electronic execution platforms

[exchanges, SEFs, OTFs,

DCMs]

CCPs and DCOs Confirmation Providers

Intermediaries (Interdealer

brokers)

Custodian and asset servicers

Any other middleware providers

GTR

GTR REPORTING MODELWe work with our client community and with

regulators to build the most appropriate models

to comply with regulation and user governance

requirements. The robustness and safety of our

infrastructure protects client data and respects

the confidentiality of that data.

Our utility, non-commercial model works for the

interests of users and the market as a whole.

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GTR IN EUROPE: KEY NUMBERS

42

3,500

30M

500M

Regulators

Clients

New transactions weekly

Messages per month

Trade Repository 1 DDRL Trade Repository 2

Millions9,0008,0007,0006,0005,0004,0003,0002,0001,000

2017201620152014

GTR Europe (DDRL)The biggest trade repository in terms of reports collected from the client

ESMA calculations based on weekly statistics provided by the trade repository - 11 January 2018

Trade Repository 3 Trade Repository 4 Trade Repository 5

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In addition to GTR, DTCC offers other key of

post-trade solutions to help improve the quality

of data required by SFTR.

LEI reportingThe GMEI utility, DTCC's LEI solution, provides

a single, universal, standardized LEI to any

eligible entity, thereby helping firms adhere to

their SFTR reporting requirements.

Trade matchingDTCC's CTMTM platform allows repo clients to

DTCC'S POST-TRADE PROCESSING SOLUTIONS FOR SFTR COMPLIANCE

match buy/sell-back and single security bilateral

repo transactions.

CTM enables the enrichment of Standing

Settlement Instructions for repo transactions via

DTCC's ALERT® service.

To learn more about how DTCC can help firms

manage the post-trade processing, please visit

www.dtcc.com/sftr.

PRE USER ACCEPTANCE TESTING (UAT) PHASE TO PRODUCTION

Pre UAT

• Access to community industry working groups

• Access to online documents and videos

• Webinars

• Message specification and user interface tools

UAT

• Access to the simulator tool

• Global UAT support

• Testing scripts

• UAT management information systems

Production

• Global support

• Post production webinars

• Industry webinars

• Access to our Regulatory Relations team

Pre User Acceptance Testing (UAT) phase to Production

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6,000 open positions per weekclients 40M

100,000 individual entities60 regulators accessing our data

WHY DTCC?DTCC GTR is the industry leader in trade

reporting for derivatives, serving the data- and

risk-management needs of more than 6,000

clients and 60 regulators across the globe

through its stable, reliable infrastructure.

In 2017, GTR tracked over 40 million open

positions per week globally, processing over 1

billion messages monthly on some 100,000

individual entities.

DTCC is a true market utility. As a user-

owned and -governed trade repository GTR

upholds high standards of client service

and collaboration, partnering with clients to

enhance and expand functionality in response

to changing regulatory mandates. GTR intends

to extend this service for SFTR to continue

to provide clients an efficient, class-leading

service designed to assist clients throughout

the reporting lifecycle. GTR is the only trade

repository currently positioned to expand its

SFT offering globally while other jurisdictions

come into force, reducing implementation costs

for firms operating in multi jurisdictions. GTR

Europe is divided almost equally between the

UK and the rest of the EU and is committed

to providing trade repository services in both

locations post Brexit.

For more information on DTCC and our products and services, visit DTCC.com or emailSFTR@dtcc.com

This document is for information purposes only, and does not constitute legal advice. Readers should consult their legal advisors for legal advice in connection with the matters covered in this document. The services described are governed by applicable rules, procedures, and service guides for relevant DTCC subsidiaries, which contain the full terms, conditions, and limitations applicable to the services. ‘GTR’ and ‘Global Trade Repository’ are brands under which, through its subsidiaries, DTCC provides regulatory reporting services for derivative transactions across multiple jurisdictions (the ‘GTR Services’). Each DTCC subsidiary offering GTR Services is a legally separate and independent entity. Some GTR Services may only be available from certain DTCC subsidiaries.

With over 45 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From operating facilities, data centers, and offices in 16 countries, DTCC, through its

subsidiaries, automates, centralizes, and standardizes the post-trade processing of financial transactions, mitigating risk, increasing transparency, and driving efficiency for thousands of broker/dealers, custodian banks, and asset managers worldwide. Industry owned and governed, the firm simplifies the complexities of clearing,

settlement, asset servicing, data management, and information services across asset classes, bringing increased security and soundness to the financial markets.

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