Guidelines on Risk Mitigation Requirements for Non-Centrally Cleared Over-the-Counter Derivative Contracts

Provides guidance on the risk mitigation measures for dealing in Over-the-Counter (OTC) derivatives that are not centrally cleared.

Operational Risk

Applies to: Exempt Capital Markets Services Entity

View Document Guidelines on Risk Mitigation Requirements for Non-Centrally Cleared Over-the-Counter Derivative Contracts (563.8 KB)

These guidelines apply to banks, merchant banks and finance companies which deal in capital markets products that are OTC derivatives and not centrally cleared by a clearing house.

They set out guidance on policies and procedures that the financial institution should put in place to govern the relationship with its counterparty in relation to:

Trading relationship
Trade confirmation
Valuation
Portfolio reconciliation
Portfolio compression
Dispute resolution