Swaps End-User Update - What End-Users Need To Know About Portfolio Reconciliation

In 2014, swap dealers will contact end-users to engage in swap portfolio reconciliations. End-users should understand:

1. Why portfolio reconciliation is required under the Dodd-Frank rules, as well as by the European Market Infrastructure Regulation;
2. What portfolio reconciliation is; and
3. What end-users need to do for portfolio reconciliation.

Why portfolio reconciliation?

Portfolio reconciliation is required under the Dodd-Frank ("DF") swap documentation rules (the "DF Swap Documentation Rules") and the European Market Infrastructure Regulation ("EMIR") risk mitigation techniques (the "EMIR RMTs"). Portfolio reconciliation is intended to mitigate overall risk associated with uncleared swaps by proactively identifying and resolving mismatches in material terms and valuations. The DF Swap Documentation Rules require every swap dealer to "establish, maintain, and follow written policies and procedures reasonably designed to ensure that it engages