Adequate procedures and controls associated with swap transactions should exist to help minimize the risks inherent in transaction process. Example/s of these controls may include:

Question

Quizplus · Accepted Answer

All of the listed controls (A, B, and C) are important in minimizing risks in swap transactions. A daily reconciliation of traders' positions helps to identify any errors or discrepancies in the trade process. Independent sign-off procedures for hedging models and clear definitions of hedge strategies help to reduce market risk. Authorization and affirmation of all transactions ensure that they are legitimate and approved. Therefore, all of these controls should exist to minimize the risks inherent in swap transactions.

Adequate Procedures and Controls Associated with Swap Transactions Should Exist