European firms may be a bit punch-drunk from meeting MiFID II’s and EMIR’s reporting requirements, but they should take this relative calm before the EU’s Securities Financing Transaction Regulation goes into effect to prepare for the new reporting regime.

The EU initially slated the publishing of the final regulatory technical standards for the first quarter of 2018.

“It seems to be postponed, and we expect it sometime in the second quarter — maybe in June or July,” said Andrea Ferrise, compliance officer at UnaVista during a webinar. “The reporting obligation will go live 12 months after its publication in a phased approach.”

Investment firms and credit institutions will be the first organizations obligated to report once the regulation goes into effect.

SFTR will add additional reporting obligations for other financial and non-financial counterparties during four three-month subsequent phases.

The staggered start will be challenging for firms since the counterparties in the dual-reporting regime will have different timelines on when they will need to start reporting, according to Rebecca Dean, associate director at advisory firm Grant Thornton and who also participated in the webcast.

“This may lead to more mismatches due to timelines not only for firms but regulators and trade repositories as well,” she added.

Firms may leverage the EMIR-reporting experience to help prepare for SFTR reporting, especially regarding obtaining unique trade identifiers.

“The only difference I would say is that we would expect to see more transactions happen on the platform, which would generate more UTIs,” said Dean.

However, there is a three-month gap between when the first set of firms need to report transactions and when central counterparties are required to report, which leaves people asking “Who will generate the UTI,” noted Ferrise.

“I guess we will see on day one of the regulation,” he added.

Other issues faced by affected firms is the greater amount of data that SFTR requires compared to earlier reporting regimes.

“There are 153 fields that firms will need to populate: 18 counterparty fields, 99 transactional fields, 20 margin fields, and 16 re-uses fields,” said Dean.

ESMA expects reporting firms to populate 65 fields in each report, which is a lot when compared to MiFIR’s overall list of 65 fields, added Ferrise.

“We’ve seen some other industry polls that somewhere around 40% of these fields firms may not even have current,” said Steve Holland, a product manager at UnaVista. “That is a huge issue.”

The webinar participants all agreed that it is not too early for firms to address these issues from a process and IT perspective.

“It is a new thing that firms will have to deal with understanding the products, the transactions and, more often than not, the different systems involved,” said Dean. “So they may want to consider the IT issues such as mining the data internally within the organization give the number of fields they will need to populate.”