FX Swaps & Fwds EXEMPT from Dodd Frank – OFFICIAL!


At last!

US Treasury Secretary has finally determined that FX Swaps and FX Forwards should be exempt from the definition of Swaps under Dodd Frank. (full details here or here)

SEF Trading & Central Clearing (Exempt): FX Swaps and FX Fwds will NOT be required to trade on SEFs, or be centrally cleared.

Trade Reporting (Required): FX Swaps and FX Fwds will remain subject to reporting requirements according to the CFTC (see earlier post here)

Other FX derivatives subject to Clearing & Exchange Requirements: FX Options, Currency Swaps and Non Deliverable Forwards (NDFs) are not exempt from Dodd Frank, as they do not satisfy the statutory definition of an FX Swap of FX Forward.

As usual, the Streetwise Professor has a good analysis of the determination, worth reading here

Other coverage includes:

WSJ here

FT here

8 Responses

  1. […] in my last post, non-deliverable forwards (NDFs) will remain subject to Dodd Frank regulations here. This means, they will be subject to central clearing, and trade reporting. But, that being the […]

  2. […] to see whether that trend reverses now that the US Treasury Secretary has determined that FX Swaps and Fwds will be exempt from Dodd Frank and SEF regulations! Although of course that still leaves NDFs and FX options […]

  3. […] FX Spots, Fwds, and Swaps which are exempt from Dodd Frank will continue to trade on the SDPs, although these instruments may be required to be reported to a trade repository. […]

  4. […] hypothetically, were FX Swaps were to be subject to mandatory clearing, which they are not as FX Swaps and Fwds have been exempted, then according to professor Duffie, anything more than a single CCP, could actually increase […]

  5. […] now looks as if FX spot, forwards and swaps are almost certainly going to be exempt from Dodd […]

  6. […] hypothetically, were FX Swaps to be subject to mandatory clearing, which they are not as FX Swaps and Fwds have been exempted, then according to professor Duffie, anything more than a single CCP, could actually increase […]

  7. […] of course, the other great thing is that FX Swaps are (still) exempted from the SEF regulations, and therefore will continue to be tradeable via SDPs, which deliver a far higher level of […]

  8. […] story plays on the fact that it’s now been a year (29 Apr 2011, we covered it here) since the US Treasury issued its proposed determination to exempt FX Fwds and Swaps from mandatory […]

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