> Standard representations given plus a representationthat adherence will not adversely affect enforceability of any third party guarantee/security > If any adhering party has provided a guarantee/security, deemed consent with EMIR – Non-financial counterparty page 2 2. EMIR’s risk mitigation obligations also call for adequate capital to cover exposures arising from OTC derivatives not cleared through a dedicated clearing house and for segregated exchange of collateral, though until such time as the European Supervisory Authorities develop technical standards on the treatment of collateral, parties may apply their own rules. Those EMIR rules cover timely confirmations, marking to market, portfolio reconciliation, portfolio compression, valuation, and dispute resolution. The Portfolio may Data Financial Services analysis: Matthew Dening of Sidley Austin LLP comments on the International Swaps and Derivatives Association’s (ISDA’s) EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol, under which parties will be able to amend the terms … However, institutions with only a … The frequency depends on the number of OTC contracts which are not centrally cleared and the EMIR classification of the entity. Parties shall agree on the arrangements under which the portfolios shall be reconciled. The Extension Agreement allows parties that have adhered to the ISDA March 2013 DF Protocol (“DF Protocol 2”) to adopt the EMIR portfolio reconciliation requirements without adhering to the ISDA July EMIR Protocol. 2.3 Portfolio reconciliation and escalation By now any portfolio reconciliation and discrepancy escalation procedures should be well established, as the EMIR business conduct rules come into effect on 13 Sep-tember 2013. The Protocol is designed to enable parties to amend the terms of their agreements to reflect the portfolio reconciliation and dispute resolution requirements imposed by EMIR. FC and NFC+ each business day when the counterparties have 500 or more OTC derivative contracts outstanding EFET Portfolio Reconcilaition Standard Version 1.0 a, December 2013 Page 2 of 18 Revision History Version Date Changes Author of changes 0.1a December 1 New document EFET Portfolio Reconciliation WG 0.1b December 19 Updates Input by Centrica 0.1c January 20 Updates Input by GDFSuez, EDFT, E.ON, (a) adhering to the “ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol” (“ISDA Protocol”), which is a set of documents prepared by the International Swaps and Derivatives mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to The protocol enables parties to amend their ISDA Master Agreements (and other agreements) to comply with EMIR’s obligations relating to portfolio reconciliation and dispute resolution. The regulatory technical standards requiring written agreement of the parties of procedures for portfolio reconciliation and dispute resolution come into force on 15 September. What is EMIR? EMIR that relate, amongst other matters, to Portfolio Reconciliation, Dispute Identification and Resolution Procedures and Timely Confirmation (please see further details in the relevant sections below); and (ii) act as a supplementary set of terms which the Parties agree are incorporated into and The ISDA 2013 EMIR portfolio reconciliation, dispute resolution and disclosure protocol – preparing for the 15 September 2013 obligations under EMIR. counterparties in the reconciliation process. Are all market participants affected by EMIR in the same way? Of course, the agreements Portfolio Reconciliation (1) Reconciliation. They are also agreeing to except EMIR-mandated disclosures from existing confidentiality agreements. Generally speaking, by adhering, parties are agreeing to a market-standard process for portfolio reconciliation and dispute resolution. The implementation of these obligations will require, amongst other, amendments to the agreements with ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol (a) With effect from September 15, 2013, the provisions of March 2013 DF Schedule 4 (as modified and, where not previously applied, as applied below) of each Subject Agreement will be employed by the Parties to facilitate compliance with the Portfolio Reconciliation Risk Mitigation Techniques (as defined below). fund adheres to the ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol (the “Risk Mitigation Protocol”)19, an Irish fund will need to enter into an arrangement with each and every counterparty with whom the fund enters into uncleared OTC trades to ensure that procedures for portfolio reconciliation are agreed. It sets requirements for the authorization, registration, organization and supervision of European TRs. These technical standards require agreement of the parties before a The ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol allows counterparties to amend the terms of their ISDA Master Agreement to implement the portfolio reconciliation and dispute resolution requirements imposed by EMIR. July 2013 EMIR Protocol. The Protocol also includes a disclosure waiver to help ensure that parties can meet the various reporting and record keeping requirements under EMIR without breaching confidentiality restrictions to which they may be subject. The European Markets Infrastructure Regulation (EMIR) regulates the European derivative markets, central counterparties (CCPs) and trade repositories (TRs). Portfolio reconciliation – counterparties must agree in writing the portfolio reconciliation process. Portfolio Reconciliation Requirements means the portfolio reconciliation risk mitigation requirements under the EMIR Rules to which one or both parties are subject. Reconciliation frequency: For FC (both FC- and FC+) and NFC+: - Daily if ≥ 500 contracts; The counterparties listed here wish to comply with the EMIR portfolio reconciliation rules which commenced on September 15, 2013, and otherwise satisfy the conditions set forth in CFTC Letter No. The parties shall, with the frequency specified in paragraph 2 and in accordance with the procedure agreed in paragraph 3, reconcile all data (“Portfolio Data”) which are relevant for the valuation or the settlement of each outstanding Transaction. “Agreed Process” means any procedure agreed by and between the Parties in connection with a Dispute other than that stated in Article 3. This document seeks to allow for EMIR-compliant documentation for parties that have adhered to the Dodd-Frank March Protocol ("DFP2") and do not wish to adhere to the ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol ("EMIR Protocol") in addition to this. EMIR legislation (level 1 text) was implemented in 2014. The extent to which EMIR obligations apply to a market participant depends EMIR – Financial counterparty page 4 “Agent” means an entity appointed to deal, exclusively on behalf of the Party that appointed it, with the other Party with respect to all or certain actions pursuant to the relevant provision. appropriate prudential requirements 8. to the Client as being a Portfolio Reconciliation Due Date, unless such a date is not on a Business Day in which case it will be the immediately following Business Day. have an EMIR-compliant master agreement by that date? At the same time, the imposition of a comprehensive reporting requirement on market participants may increase the value of the information maintained by trade repositories also for third parties providing ancillary services such as trade confirmation, trade matching, credit event servicing, portfolio reconciliation or portfolio compression. ISDA has published the DFP2 to EMIR Top Up Agreement. The Exchange method requires both parties to send … Customers with an ISDA agreement are asked to adhere to the “ISDA 2013 EMIR portfolio reconciliation, dispute resolution and disclosure protocol”. 3. Portfolio reconciliation is the process used to ensure that key transaction terms of transactions in a derivative portfolio between two counterparties are in agreement. The EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol (cont.) The rules require FCs to send confirmations for each transaction within a range of deadlines dependant on the status of the counterparties, the type of derivative, and the date of execution (the timing requirements are phased in). Data Portfolio Reconciliation Agreement The Parties agree to carry out portfolio reconciliation (i.e., the approval of the valuations of outstanding Under the extension agreement, parties agree to use their existing arrangement under the March 2013 DF Protocol to help them comply with the portfolio reconciliation and dispute resolution requirements of EMIR without completely adopting the July 2013 EMIR Protocol. In order to help market participants establish the procedures required by EMIR, ISDA has released the ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol (the “EMIR Protocol”).But adhering is not the only way to ensure that you will be able to trade with EU financial entities as of the coming deadline. Only parties that have adhered to DF Protocol 2 and that have matched as counterparties may enter into an Extension Agreement. 5. On the heels of the initial reporting requirements under Article 9 of EMIR and the ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol, the next stage of reporting requirements has come into effect. Proposals for legislative amendments to the EMIR reporting architecture, as expressed in the ESMA's Final Report Review of the Regulatory and Implementing Technical Standards on reporting under Article 9 of EMIR of 13 November 2015 (ESMA/2015/1645), do not envision other major modifications with regard to portfolio compression reporting, description and population of the relevant fields. EMIR timeline – next start dates Portfolio Compression, Portfolio Reconciliation and Dispute Resolution Portfolio Compression, Portfolio Reconciliation and Dispute resolution requirements become applicable as of 15 September 2013. derivatives (timely confirmation, dispute resolution, portfolio reconciliation and portfolio compression) from which there are no exemptions. “ISDA March DF Supplement”) and the ISDA DF Protocol Extension: EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure also published by ISDA on September 10, 2013 (the “Extension Agreement”); WHEREAS, the parties desire to amend the … Customers with a Nordea Master agreement receive a letter with amendments to the existing agreement, which automatically take effect unless the customer contacts Nordea about this. Into an Extension agreement disclosures from existing confidentiality agreements ) and NFC+: - Daily if ≥ 500 ;. 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