The SFTR Corporate Actions Working Group, formed in May 2019, was tasked with clarifying and resolving the challenges of processing and reporting corporate actions under the Securities Financing Transactions Regulation. The working group consisted of both lenders and borrowers, corporate actions and operational experts. ISLA advised on it's understanding of SFTR and thereby its unique position within the industry, to bring together market consensus on corporate actions processing. Recognising that no two participants would follow identical booking procedures and timelines, matching breaks at the trade repository (TR) were likely to be high, presenting an area of ambiguity for the industry.
As of January 2020, the European Securities Markets Authority (ESMA) have not provided significant guidance for corporate actions. To assist the market in reporting SFT related corporate actions, ISLA's SFTR CA working group have agreed a comprehensive set of practices which member firms can use.
This has been achieved by:
1) Defining an agreed universe of Corporate Actions (CAs).
2) Determining which CAs have effects on the lifecycle events of SFTs and are therefore reportable under SFTR.
3) Agree a standard approach (best practice) for the industry in the CA scenarios discussed in this guide. (COAC-131 FOR ISLA REVIEW)
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