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UTI Generation for Corporate Actions

UTI Generation for Corporate Actions

Description

- Some corporate actions will require a UTI to be assigned to the new trade for SFTR reporting.

- This applies to all new trades which are then subsequently reported under a NEWT message to the TR.

- UTI Creation should be in adherence with the IOSCO recommendations 2.

- Borrowers and lenders should agree at a relationship level, who will be responsible for UTI creation of all transactions under a securities lending agreement.

- It is expected that in most circumstances the lender will assume the responsibility of UTI creation unless the lender is unable to.

- As data is likely to flow from lender to borrower but less likely to flow the other way, it is expected that in most cases it will be the entity that is mostly a lender in the relationship (or its agent) who creates the UTI.

- The entity responsible for UTIs will create the UTI for all transactions, including where the underlying beneficial owner is a Non-Financial Counterparty or an entity that does not have a reporting obligation.

- The ISLA workflow, as part of the main SFTR Best Practice, which can be found on the ISLA website, is designed so that the lender is the UTI Creator at every opportunity

Best Practice

- The same practices applied to the creation of a UTI on the parent SFT trade, are to be applied to the corporate action.

- If a firm has created the UTI for the parent, they will be responsible for the UTI on the new corporate action trade. Example: (Click here to view) (COAC-115 FOR ISLA REVIEW)

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