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  1. As part of reasonable due diligence PTRRS users should aim to have a basic, understanding of the design of the proprietary risk reduction algorithm(s) used by the service provider.
  2. PTRRS users should seek to ensure via their due diligence and risk management practices that PTRRS service providers have established back-up measures and processes in case of a provider outage or during a wind-down.
  3. PTRRS users should aim to ensure via their due diligence that established systems and procedures are in place for robust data management and safekeeping of commercially sensitive data on the portfolio of the clients.
  4. PTRRS users should seek to ensure that there is proper disclosure and controls around PTRRS documentation to ensure legal certainty around the timing of execution and confirmation of new trades, and the legal documentation with the PTRRS provider, such that the process and contractual terms of the service are clear and unambiguous, in compliance with regulatory requirements, including trade reporting.
  5. PTRRS users should continue to monitor their portfolios to confirm that counterparty risk is reduced following a counterparty risk optimisation/rebalancing exercise.
  6. IOSCO members should observe carefully:
    • The implications of market concentration among PTRRS providers and whether market concentration results in any potential risks to PTRRS users;
    • The level of competition among providers and if a low level of competition is having negative impacts on innovation, pricing and quality of services, with the objective to ensure the service provision is the most cost beneficial service to the PTRRS users; and • The onboarding procedure and access to PTRRS is fair, particularly in the case of smaller firms. In addition, in the event of insolvency of a major PTRRS provider, change of PTRRS providers should be achievable to facilitate a transfer to another service provider.
  7. Where appropriate, PTRRS users should consider requesting PTRRS providers standardize their file formats and data collection practices.