Reflections of the CEO

ISLA's 28th Annual Securities Lending & Collateral Management Conference | Dublin Morning Briefing

As we pass the mid-year point and find ourselves in the month of July, many of us are looking ahead to a much needed summer break. It is perhaps appropriate therefore, to pause for a moment and reflect upon the first six months, whilst looking ahead to what we might expect when we all return to our desks.

Inevitably, much of our work and the focus of the industry has been around the implementation of SFTR. In March, the Regulatory Technical Standards (RTS) for SFTR were published, setting in place a clear implementation timetable between now and April 2020. Although there is still considerable work do across the industry to comply with these new statutory reporting obligations, I have been struck by how many people are looking past the immediate technical and operational challenges posed by SFTR, and thinking about what this type of transparency means more broadly.

In May, Colm Kincaid, Director of Securities and Markets Supervision at the Central Bank of Ireland (CBI) spoke at our Morning Briefing event in Dublin, where he highlighted the strategic role that data will play in a post-SFTR world;

“We have therefore made it our strategic focus over the next three years to build our technological capability to harness the increasingly vast quantities of data reported to us, in order to enhance our supervisory approach and build up the systematic use of data analytics to support our supervisory engagement and outcomes.”

The same theme was explored when Steven Maijoor, the Chair of ESMA provided a keynote address at our 28th Annual Securities Lending and Collateral Management Conference in Madrid last month. During his address, he also highlighted the importance of data and ESMA’s data strategy;

“Data has become the fuel of today’s economy. Most of the decisions made today require data. Data has changed radically our lives compared to one or two decades ago. The advances in information technologies have created a highly data-intensive environment and revolutionised business models, including in the financial sector. Data is however a fuel which still requires a lot of refining. High data quality has been a purposeful objective for many authorities and private entities. As a central EU authority for supervisory reporting, ESMA has set out a data strategy to ensure alignment of the different functions and objectives that the EU legislative framework has granted to ESMA.”

If you have not read our conference round up, it provides not only a summary of the key issues and topics that were discussed over the three days in Madrid, but also sets out where current thinking is leading the industry in areas such as technology and the developing ESG agenda. As we look towards the remainder of the year, we expect those themes to gain momentum with areas such as Common Domain Model and Digitalisation featuring prominently at our annual Post Trade Conference on October 1st in London.

Whilst the summer may offer some opportunity for valuable rest and relaxation, the pace around SFTR is likely to quicken as we move into what are traditionally quieter months. On the 15th July, ESMA will be holding an Open hearing on the SFTR RTS which will be followed on the 16th by an ‘invitation only’ closed-door Workshop in Paris. This is a valuable opportunity for the industry to articulate questions and concerns ahead of the formalisation of the Level Three text later this year.

Whilst this part of our blog may take something of a pause over the coming weeks, we hope to introduce in due course, periodical blog updates around the work ISLA is doing on all facets of SFTR, including corporate actions and the role of LEI’s in our world.

In finalising, I on behalf of myself and the ISLA team, wish you a great summer.

Andrew Dyson, CEO

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