Alan McIntyre of Quorsus provides some advice for how firms should try and make the most of the unexpected 3 month delay of SFTR reporting
We’re experiencing a period of uncertainty, volatility and concern that is unlike anything any of us have ever known. As we deal collectively with the impact of COVID-19 and the previously unfathomable impact on everyday life, many certainties are being challenged and many aspects of contemporary living seem bizarre. This fascination with toilet roll in response to an upper body respiratory affliction for example. If you’ll forgive some flippancy (after all some levity is a much needed tonic) it’s not all bad. We’ve stopped talking about bloody Brexit for once! And my hands have never been so clean.
Some might argue that last weeks delay of SFTR by ESMA as announced here could be considered a silver lining on the cumulus nimbus obscured horizon. After all, who wouldn’t want an additional three months to get such a huge project across the line. Especially with remote working, childcare considerations, potentially reduced hours and the sheer distraction of all this stay home malarkey. But the point here, and make no mistake it’s an important one, is that 3 extra project months is exactly how this should be approached.
In every crisis there is an opportunity says as the famous Chinese proverb. And this is definitely an opportunity. This is not the time to divert resources to other projects, important as they may also be. It’s three extra months of testing your SFTR reporting. It’s additional time to assess and improve the quality of the all-important data. It’s additional time to start thinking about and implementing the controls framework and quality controls. Most of all it’s three months to mitigate some of the pain that will inevitably come when the reporting commences, and urgent issues need remediated pronto.
We’ve been here before, albeit not with three odd weeks to go. We experienced delays with the original Dodd-Frank Act, CFTC reporting. We had delays with the rollout of EMIR reporting. And more recently MiFID II was delayed for a year. The context for these delays was very different to the Netflix movie we are all currently living through. But one theme remains true and same lesson was learned each time. Use the time productively and use it to improve. ESMA and the European Commission said explicitly when they delayed MiFIR that they expected the reporting to be better and the implementation to go more smoothly as a result. True to the proverb, this crisis has resulted in an opportunity. Embrace that opportunity is the advice of your friends here at Quorsus.
At QUORSUS, we are making Data Quality a core part of our mission and we are already working with a small group of firms to improve data standards as we look forward to SFTR, the CFTC re-write, and much more. More updates to follow. In the meantime, get in touch if you want to learn more.