e-Forex Magazine | Foreword | Correcting market imbalances and minimising over-regulation

Foreword : Correcting market imbalances and minimising over-regulation

First Published in e-Forex Magazine July 2011

Manfred Wiebogen

Manfred Wiebogen

President ACI The Financial Markets Association

The recently announced proposed determination by the US Treasury Department to exempt foreign exchange forwards and swaps from sweeping new derivatives rules, specified under the Dodd-Frank Act was welcomed by both financial and non-financial groups, alike. ACI regards this development as fundamental for the sustainability and effective function of stable and liquid (cash) markets.

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Concerns that associated costs to introduce centralized clearing (CCP) of non derivative currency contracts may impair market participants, in particular the 'buy side' to preserve the ability to obtain economic pricing for currency risk management, were justified. Not to mention that CCPs would have increased concentration risks, as countless transactions would have had to settle through a few clearing houses.

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