On Thursday, 19 March 2020, the European Securities and Markets Authority (ESMA) published a Public Statement setting out its approach to the reporting obligation under Regulation (EU) 2015/2365 on transparency of securities financing transactions and of reuse (“Securities Financing Transaction Regulation” or SFTR). Noting significant impact caused by the COVID-19 outbreak on the EU financial markets, in its Public Statement ESMA sets out coordinated supervisory actions to provide mitigating measures in respect of the SFTR reporting obligations that are due to become applicable for credit institutions, investment firms and relevant third-country entities on 13 April 2020. As stated in the Public Statement, “ESMA understands that the SFT reporting implementation is now heavily impacted by the COVID-19 pandemic. Counterparties, entities responsible for reporting and report submitting entities and TRs face severe resource restrictions in implementing at the same time contingency plans to ensure the continuity of their operations and ongoing projects to meet new regulatory requirements.”
To this end, ESMA calls on national competent authorities “not to prioritise their supervisory actions towards counterparties, entities responsible for reporting and investment firms in respect of SFT reporting obligations, under SFTR and under MIFIR, as of 13 April 2020 and until 13 July 2020, including regarding to SFTs concluded in that period of time, and to generally apply their risk-based approach in the exercise of supervisory powers in their day-to-day enforcement of applicable legislation in this area in a proportionate manner”. In addition, ESMA does not consider it necessary for any trade repository to be registered for SFTR reporting purposes by 13 April 2020. Finally, ESMA admits that it is not available to record the details of SFTs reported. Stakeholders should therefore continue their preparations to comply with the SFTR reporting requirements albeit with the new start date, i.e. 13 July 2020.