Jordan & Jordan - OTC Derivatives Reform (Frank Dodd Title VII)

Jordan & Jordan has an extensive track record in helping U.S. firms address the impact of regulatory change on workflow, sales and trading, front and back office processes, technology systems, and compliance and risk policies and procedures. The new requirements stemming from Dodd-Frank legislation are no exception, as Jordan & Jordan is preparing firms for the effects of OTC derivatives reform.

To meet the mandates of Title VII of the Dodd Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC) and other regulators have published proposed, interim and final rules that are largely aimed at OTC derivatives, yet have firm-wide implications. While some of the new rules have not been finalized and effective dates remain uncertain, many are now falling quickly into place and the clock for compliance has begun ticking.

If you plan to participate in the OTC derivatives markets in 2013, now is the time to act.

How will the requirements of Title VII impact your businesses day-to-day?

Jordan & Jordan can assist with the significant work that lies ahead with changes to trading, operations, technology platforms, compliance policies and procedures, financial/risk controls and other critical support areas.

You must prepare now to:

Determine if you will register as a Swap Dealer (SD), a Major Swap Participant (MSP) or Eligible Contract Participant (ECP);
Create bifurcated workflows to identify and process centrally cleared vs. bilateral trades;
Execute trades on registered Swap Execution Facilities (SEFs) or Designated Contract Markets (DCMs);
Maintain rigorous credit/risk management and margin/collateral programs;
Meet complex reporting requirements;
Adhere to strict codes of conduct for internal and external business activities;
Track new identifiers including USIs (Unique Swap Identifiers) and counterparties’ LEIs (Legal Entity Identifiers)

Coordination with your current third party service providers or selection of new vendors (clearing agent, affirmation platform) and integration with numerous in-house systems (back-office, credit/risk) will be needed to meet the requirements of the new regulations.

Jordan & Jordan’s consultants have deep experience across asset classes in regulatory and compliance matters related to trading, clearing, credit/risk, margin/collateral management, and financial controls. Our knowledge base, in conjunction with our reputation for project management on industry-driven initiatives, will provide you with the expertise and skills needed to produce a practical roadmap and implement your Dodd-Frank related initiatives. Leveraging our ability to stay abreast of the regulations as they move forward, and with an understanding of the resulting business and operational impacts, we will work with your staff to define and implement the many projects that must be undertaken to comply with Dodd Frank Title VII and support your OTC derivatives business going forward.

To learn more about how Jordan & Jordan can help your firm, please email Mary Lou Von Kaenel or call (212) 652-4483.