On August 27, 2012, the CFTC approved final rules which establish requirements for the (i) documenting of swap trading relationships between swap dealers ("SD") or major swap participants ("MSP") and their counterparties, (ii) timely and accurate confirmation of swaps and (iii) reconciliation and compression of swap portfolios. The Final Rules also set out the documentation requirements for swaps with respect to which an end user has elected to avail itself of the exception from mandatory clearing and delay the effective date of certain requirements of the external business conduct rules until January 1, 2013.

Swap Trading Relationship Documentation (§23.504) -

The Final Rules require SDs and MSPs to establish, maintain, and follow written policies and procedures reasonably designed to ensure that the SD/MSP executes written swap trading relationship documentation with its counterparties. Such policies and procedures must be approved in writing by senior management. Swap trading relationship documentation (other than confirmations) must be executed prior to or contemporaneously with entering into a swap transaction with any counterparty. There is no exemption from the requirement to enter into swap trading relationship documentation for swaps between affiliates.

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