EU rules require counterparties to agree in advance on procedures to identify, record, and monitor disputes over the recognition or valuation of a contract and the exchange of collateral, and on procedures to resolve them in a timely manner. Disputes not resolved within five business days need a specific process1.

US rules require swap dealers and similar firms to have written policies and procedures reasonably designed to resolve valuation discrepancies within five business days2. The period is a target for the procedures: a dispute that runs past five business days does not breach the rule if the firm followed its procedures.

Notes

  1. Commission Delegated Regulation (EU) No 149/2013, Article 15(1) (source: the original text as adopted, on legislation.gov.uk). ↩

  2. 17 CFR 23.502(a)(5). On the absence of a breach, CFTC, 77 FR 55904, section "11. Resolution of Valuation Disputes in Portfolio Reconciliation", the Commission's response to comments. ↩