The European regulation known as "SFTR" (Securities Financing Transactions Regulation) aims to legally regulate securities financing transactions that involve at least one European counterparty. This regulation represents a significant and ambitious advancement in financial security and transparency. The "reporting" component of the regulation was built on a technically phased implementation schedule that had already been tested by Brexit.

However, this schedule did not survive the impact of COVID-19. Banks and investment firms were initially required to submit their first reports by April 13, 2020. Yet, the current constraints imposed by the coronavirus pandemic have hindered the ability of market participants to comply with this obligation.

In a joint letter dated March 16, 2020, the executive directors of the International Capital Market Association (ICMA) and the International Securities Lending Association (ISLA) requested that the European Securities and Markets Authority (ESMA) delay the first "run-up" reporting from April 11, 2013, to October 11, 2020, a date that coincides with the SFTR deadline applicable to pension funds, insurance companies, AIFs, and UCITS.

Ultimately, on March 19, ESMA granted a much shorter extension, aligning the new deadline with that of CSDs and CCPs, setting the first operational reporting deadline to July 13, 2020. Thus, the extension was significantly shorter.

Furthermore, ESMA clarified that the deadlines for other entities subject to the regulation remain unchanged. This affects CCPs and CSDs (July 13, 2020), UCITS and insurance companies (October 12, 2020), as well as non-financial institutions (January 11, 2021).

ESMA's decision represents an intermediate solution in a context of disruption that raises concerns about a potential relaxation of banking regulations.