On 15 April 2021, the European Securities and Markets Authority (ESMA) published its final report on the European Markets Infrastructure Regulation (EMIR) and Securities Financing Transactions Regulation (SFTR) data quality.
The report is the first review of data quality since the introduction of the EMIR and SFTR reporting regimes. It also reviews the quality of data reported by trade repositories and gives an overview of actions taken by both ESMA and Member State competent authorities to improve data quality.
In terms of EMIR data quality, the report notes that good progress has been made in recent years in improving the quality of EMIR data. However, there are a significant number of derivatives that are being reported late, not in line with the EMIR format and content rules, as well as derivatives that do not reconcile or are not reported altogether.
In terms of SFTR data quality, the report provides only a limited overview of SFTR data quality given that the SFTR reporting regime was only launched recently. In view of the complexity and scale of SFTR reporting, it is important that all relevant stakeholders set aside sufficient resources to monitor data quality thoroughly.
Like EMIR, Brexit has also had a significant impact on the SFTR reporting landscape. There has been nearly a 50% decline in the number of open SFTs immediately following Brexit. However, the number of open SFTs has had an increasing trend since.