EquiLend SFTR: The System Behind the Solution

EquiLend Insight

EquiLend SFTR: The System Behind the Solution

By CJ Emson

July 2020

SFTR is the single most comprehensive piece of legislation which the securities finance market has ever been subjected to, ahead of the legislative agenda driving the future introduction of CSDR. While its origins are in European legislation, those trading outside of the EU in bonds, equities and other securities are additionally impacted, where the SFT is concluded through an EU or UK branch. 

For many firms and third-party SaaS providers, preparation for SFTR has involved costly improvements to enable integration with existing software or provide further enhancements for the strongest solution to facilitate SFTR reporting. Our own systems have additionally benefited from such investment, driving further enhancements to our already wide-ranging suite of trade lifecycle products, including Unified Comparison.

Unified Comparison, the nucleus of our Post-Trade Suite, underpins our SFTR solution, and operates seamlessly with NGT, our ubiquitous trading platform. Enabling clients to interact with their post-trade systems in completely new ways, the data quality from Unified Comparison is made possible by its interoperability across the broader EquiLend ecosystem and the powerful processing which is embedded within the system.

Since its launch, Unified Comparison has been at the forefront of post-trade services. Our award-winning software is incredibly feature and functionality rich and, for SFTR specifically, Unified Comparison acts as a building block to enable clients the flexibility to report all required fields accurately. Unified Comparison seamlessly supports linking allocations to omnibus trades and enables efficient matching criteria, in addition to delivering full reconciliation of books and records. This in turn future-proofs users’ regulatory reporting requirements with as little additional burden on day-to day-operations as possible.

Unified Comparison supports all equity and fixed income products, reconciling global pending trades to recognized industry standards. With data aggregation of pre-matched and confirmed trades, downstream lifecycle noise is significantly reduced. For SFTR reporting, this filtration ensures that only pre-matched data is shared with our SFTR partners, MarketAxess, for further data enrichment ahead of reporting to the Trade Repository (TR) of a client’s choosing. This segregation enables clients to resolve issues with problematic trades ahead of reporting submission, significantly reducing breaks and ensuring premium data quality downstream for both parties.       

Bringing an entire industry to a point of standardization has presented challenges far beyond those of the SFTR legislation, which will deliver long-term benefits to the sector as a whole. It is more than a decade since the systemic issues were highlighted from which the need for SFTR was identified. Even with many subsequent years of legislating, scheduling, planning and preparing, and recent delays due to the COVID-19 pandemic, readiness was still not guaranteed such was the overwhelming nature of the task.

At the heart of our SFTR solution, Unified Comparison creates systemic efficiency and further opportunity for modernization across all areas of trading and regulation, now and in the future.

SFTR

EquiLend offers a scalable, cost-effective, light-touch solution—the simplest solution in the market to meet the demands of SFTR

Who We Are

EquiLend is a global financial technology firm offering trading, post-trade, market data, regulatory and clearing services for the securities finance, collateral and swaps industries. EquiLend has offices in New York, Boston, Toronto, London, Dublin, Hong Kong and Tokyo.