Clifford Chance
Dodd-Frank Act v. EMIR: Confirmation, reconciliation, compression, and documentation rules
23 October 2012
The Dodd-Frank Act and EMIR will both impose requirements on derivatives counterparties with respect to confirmations, portfolio reconciliation and compression and client documentation.
This paper summarises and compares:
- CFTC rules: the final rules adopted by the U.S. Commodity Futures Trading Commission (CFTC) in August 2012 under section 4s(i) of the Commodity Exchange Act (CEA) (added by section 731 of the Dodd-Frank Act) prescribing standards for swap dealers (SDs) and major swap participants (MSPs) related to the timely and accurate confirmation, reconciliation, compression and documentation of swaps (17 CFR §23.500 through §23.505); and
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Draft EU rules: the corresponding provisions of the draft regulatory technical standards (RTS) specifying the requirements of Article 11(1) of the EU Regulation on OTC derivatives, central counterparties and trade repositories (EMIR) requiring financial counterparties (FCs) and non-financial counterparties (NFCs) to have appropriate procedures and arrangements to measure, monitor and mitigate operation risk and counterparty credit risk. The draft RTS were adopted by the European Securities and Markets Authority (ESMA) and submitted to the European Commission for endorsement in September 2012.
