Meeting New OTC Swap Reconciliation Rules: May Require Better Technology and Processes

Meeting New OTC Swap Reconciliation Rules: May Require Better Technology and Processes

Although reconciliation of the key terms has been a best practice for over-the-counter

Derivative trades for some time (particularly with collateralised trades), the scale of the reconciliation exercise imposed by forthcoming regulations in the EU and U.S.

has caused many market participants to undertake a fundamental review of the systems and processes in place.

For many, compliance can only be achieved by utilising a third party for provision of an appropriate technology plat form or an end-to-end service.

With imminent compliance deadlines and the late development of the requirements themselves, functionality has understandably been the focus of any sourcing process. However, from a supply chain and outsourcing perspective, a key challenge remains the manner in which the financial services - specific regulations are applied to this type of third-party arrangement.