To increase transparency and nullify the risks of shadow banking the European Commission published Securities Financing Transaction Regulation (SFTR) for repos (repurchase agreements) and lending of securities. Generally speaking, Securities Financing Transactions (SFTs) are any transactions that banks use to borrow cash or opposite way, lend cash. At the end of the maturity of SFT, the both counterparties get back their original positions meaning that SFTs act like collateralized loans which will cause reporting challenges for banks. Also, some of the biggest challenges for banks are, of course, to implement the current reporting systems to new regulation and find or even create the missing data fields relevant for reporting.
BearingPoint Finland arranged a SFTR breakfast event at Hotel Kämp in Helsinki on June 6. We were honored to recognize that the event gathered lot of attention and reached high-level attendance from representatives of Finnish banking industry. The great interest and high-rate of participants confirmed the relevance of this topic.
Our experts and colleagues from Frankfurt’s office, Yvonne Quint, Christian Boeth, Sabine Pieper and Alexander Becht talked about the contents, challenges and solutions for a targeted implementation of the SFTR. Our external speaker, Inna Aaltonen from Finanssiala Ry (Finance Finland, FFI), opened some of the biggest challenges of current and up-coming regulations. One of the main challenges are overlapping and inconsistency between several regulations. In ideal situation so called data language would be coherent and authorities could take regulatory reports from the same place or system. BearingPoint tackles this challenge by providing an award winning regulatory reporting software Abacus which, in short, works as a one-point system for a client to ease regulatory burden.
Overall, the event was success for all parties. Many questions were answered, and participants had plenty of interesting topic related conversations. We are excited to see what SFTR will bring to us!
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