Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading

Coun­ter­parties shall re­cord, ob­serve and mit­ig­ate op­er­at­ing risks and coun­ter­party risks as­so­ci­ated with de­riv­at­ives trans­ac­tions in ac­cord­ance with Art­icle 107 para­graph 1. In par­tic­u­lar, they must:

a.

con­firm the con­trac­tu­al terms of de­riv­at­ives trans­ac­tions in a timely man­ner;

b.

have pro­ced­ures for re­con­cil­ing port­fo­li­os and man­aging the as­so­ci­ated risks, ex­cept for when the coun­ter­party is a small non-fin­an­cial coun­ter­party;

c.

have pro­ced­ures for identi­fy­ing and resolv­ing dis­putes between parties at an early stage;

d.

reg­u­larly, but at least twice per year, per­form port­fo­lio com­pres­sion where this is ap­pro­pri­ate to mit­ig­ate their coun­ter­party risk and provided they have 500 or more non-cent­rally cleared OTC de­riv­at­ives trans­ac­tions out­stand­ing.