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Dear CEO | Release Date: 5th September 2022

To read a longer summary of this Dear CEO letter, click here.

To access the original FCA document, click here.

Short Summary

The FCA’s portfolio letter to CEOs of Trade Repositories (TRs) and Securitisation Repositories (SRs) details the regulatory framework and expectations for managing risks and maintaining market integrity. As integral components of financial market transparency, TRs gather and store data on derivatives and exchange-traded contracts, while SRs focus on collecting and maintaining details of public securitisations to aid informed investment decisions.

The FCA outlines the responsibilities of these repositories under UK EMIR, UK SFTR, and UK Securitisation Regulation, emphasising compliance with the operational requirements and the Senior Managers Regime. Key risks identified include issues with data quality, operational resilience, and adequate governance. For TRs, concerns also include the concentration of market providers, which might affect service quality and operational resilience. SRs, being relatively new, are advised to ensure robust systems to prevent data errors that could mislead investors.

Repositories are expected to provide “direct and immediate” access to data, ensuring that regulatory authorities can efficiently use this data to monitor financial stability and support supervisory activities. They must also facilitate their customers in meeting UK reporting obligations effectively.

In response to these expectations, the FCA will actively supervise and possibly enforce regulations to manage identified risks and ensure compliance. Repositories should prepare to demonstrate how they’ve addressed these risks and maintained compliance with the regulatory framework.

Key takeaways for CEOs:

Engage with regulatory expectations, ensure robust data management and operational resilience, and prepare to demonstrate compliance and effective risk management strategies during FCA supervisions.

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