SFTR Newsflash: ESMA publishes Discussion Paper in respect of proposed RTS and ITS

ESMA published on 11 March 2016 a Discussion Paper as part of its consultations on Level 2 measures under the SFTR. The consultation is open until 22 April 2016 and ESMA has stated that it proposes to publish a formal Consultation Paper in Q3 2016, with a view to submitting a Final Report and draft technical standards to the European Commission by 13 January 2017.

The Discussion Paper focuses primarily on the SFT reporting obligation and the registration of trade repositories, including the content and format of the report.

Of particular interest are the following:

• The Discussion Paper does not make any explicit statements on the current uncertainty of whether a non-EU AIF with an authorised AIFM is subject to the SFT reporting obligation. However, paragraph 93 states that “[t]he counterparties to an SFT are subject to the reporting obligation” and the draft pro forma table of reporting fields annexed to the Discussion Paper also includes an entry for “AIF managed by AIFMs authorised or registered in accordance with [AIFMD]” as an entry for the reporting party.
• In relation to the obligations on AIFMs and UCITS ManCos to provide additional transparency to fund investors in reporting and prospectus disclosures, the Discussion Paper states at paragraph 24 that ESMA is not currently contemplating publishing any Level 2 measures setting out more detail of what needs to be disclosed.

For reference and more information on the SFTR obligations, our article on the SFTR can be found here.