ACI welcomes US Treasury "proposed determination" to exempt FX from CCP
(Thomson Reuters ONE) -
ACIFXC, the Foreign Exchange Committee of ACI The Financial Markets Association,
welcomes US Treasury 'proposed determination' to exempt FX from central clearing
under Dodd-Frank
Release Date: 11/5/11
The announced 'proposed determination' by the US Treasury to exempt foreign
exchange forwards and swaps transactions from forced clearing under the Dodd-
Frank Act is welcomed by the ACIFX. The association's international FX Committee
regards this proposal as fundamental for the sustainability and effective
functionality of stable, liquid (cash) currency markets. There has been concern
that the associated costs of mandated or enforced 'clearing' of non-derivative
currency contracts may cause severe and detrimental impact, particularly on
'buy-side' market participants ability to source robust, economic pricing for
currency risk management. Additionally, the incremental risks that would be
brought on the market through concentration of exposure and settlement would far
outweigh any benefits to all participants.
THE ACIFXC agrees with the logic underpinning the decision by the US Treasury in
recognising the unique factors in Foreign Exchange markets and difference
between FX forwards and other derivatives. The fixed terms of physical
settlement, short-term nature and well functioning settlement process have
ensured that the FX industry has continued to function continuously throughout
the market turmoil of the past decade. The ACIFXC recognises and supports the
substantial and very effective progress in the elimination of settlement risk,
which has been achieved since the introduction of/through the operation of the
CLS Bank and other payment versus payment (PVP) settlement systems.
Stephane Malrait, Chair of the ACI FX Committee comments:
"Given the global nature of the FX markets and the challenges (operational,
potential for arbitrage and otherwise) that could arise from geographical and
cross-border regulatory inconsistencies, the ACIFXC hopes that the European
regulators, in the first instance, will align themselves to this announced
'proposed determination' and recommend an exemption of foreign exchange forwards
and swaps transactions from mandatory clearing".
ACI
Members of ACI are in a large part engaged within the financial trading or sales
environment in the global financial markets representing the Foreign Exchange,
Interest Rate Products and other Securities, Banknotes & Bullions, Precious
metals and Commodities and their various kinds of Derivatives. ACI is a leading,
global association of wholesales financial market professionals. ACI counts some
13,000 international members from more than 60 countries.
ACI - The Financial Markets Association
8, rue du Mail / F-75002 Paris
T. + 33 (0) 142975539
F. + 33 (0) 142975116
managingdirector(at)aciforex.org
www.aciforex.org
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Source: ACI - The Financial Markets Association via Thomson Reuters ONE
[HUG#1514702]
Datum: 11.05.2011 - 15:52 Uhr
Sprache: Deutsch
News-ID 54540
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