ESMA Publishes New SFTR Validation Rules
ICYMI – ESMA has published new SFTR validation rules and an updated version of the ISO 20022 xml-schema applicable from 31 Jan 2022. The changes in new versions are minor and include a number of clarifications around loan and collateral data fields, generally mandating a greater degree of granularity in the reporting. The new validation rules include a number of fields becoming mandatory for additional action types, clarification that issuer LEI must not be branch LEI as well as a number of additional clarifications. The new schemas and validation rules are available here.
PRIIPs and UCITS Update
On the 15 July 2021 an 8-week consultation was kicked off by The European Commission that closes on 9 September 2021 regarding the expected proposals to amend the PRIIPs Regulation and handle the UCITS KIID to PRIIPs KID transition.
The proposal has two quick fixes – one each for PRIIPs and UCITS:
The proposals outline the transition plan to replace the UCITS KIID disclosure document with the revised PRIIPs KID based on the RTS adopted by the ESAs in February earlier this year. They are also expected to confirm the transition date of 1 July 2022 – which delays the transition by six months, originally slated for 31 December 2021.
Changes to the Technical Specification of Form N-PORT
On Monday, August 23, 2021, the SEC released proposed changes to the technical specification of form N-PORT. Changes are part of the XML Schema document (XSD). As per this release, the following two sections will be introduced on the form.
- Section B.9: If the Fund is excepted from the rule 18f-4 [17 CFR 270.18f-4] program requirement and limit on fund leverage risk under rule 18f-4(c)(4) [17 CFR 270.18f-4(c)(4)], it should provide derivative exposure in percentage of Fund’s NAV, its currency and interest rate exposure and number of days for which the fund’s derivative exposure exceeded 10% of its NAV
- Section B10: Funds subject to the limit on fund leverage risk described in rule 18f-4(c)(2) [17 CFR 270.18f-4(c)(2)] must provide median daily VaR during reporting period. Funds subject to Relative VaR test should also provide name of fund’s designated Index, Index identifier and median VaR ratio
The SEC has also published changes in technical specifications of form N-CEN. EDGAR release 21.3 has updated enumeration RELY_ON_RULE which now has 7 additional elements increasing total count to 20.
EU Short Selling Regulation’s Disclosure Threshold
On August 12, the European Commission concludes its public feedback period, for a proposed lowering of the EU Short Selling Regulation’s disclosure threshold to 0.1% (from the 0.2% threshold currently in effect). You can catch up on developments and see feedback at the Commission’s status page here.
Bill to Shorten Window of 13F Filings
On July 29, the US House Financial Services Committee voted to advance a new bill that would shorten the 13F filing window and require short-seller disclosures to the floor of the House of Representatives. Bill HR 4618 – also known as the Short Sale Transparency and Market Fairness Act – would require asset managers responsible for more than $100M in assets under management to file ownership reports with the SEC no later than 10 days after the end of each month. Current rules require asset managers to file 13Fs with the SEC within 45 days after the end of each quarter. Read more here.
FINRA Whitepaper on Cloud Computing
FINRA releases a whitepaper exploring the current state of cloud computing in the financial services industry including key benefits achieved and the challenges firms are facing. Read it here.