Continuing the focus on reducing FX settlement risk, the GFXD Operations Committee is keen to explore how the industry can better manage those instances when a FX payment is made in error

Andrew Harvey, GFXD Managing Director for Europe, moderated the first episode of the T+1 Accelerated Settlement Taskforce’s Expert Panel Series titled ‘The Broader View.’

Questionnaire includes standardised topics and questions to enhance bilateral dialogue with trading venues.

GFMA's second GFXD “Next Step FX” Diversity, Equity and Inclusion event, again showcased the Foreign Exchange market - focusing on its evolution and future developments and how this is creating opportunities for a rewarding career in FX. The event covered the transformation of the FX market and highlighted the mid-to long-term industry trends and how they are driving new opportunities for FX careers in areas such as sales, trading, operations, analytics, technology, and digital currencies.

This Trading Venue (TV) outreach will be to discuss operational challenges arising from FX Trading Venues’ Brexit planning and to share feedback on Trading Venues/banks needs and expectations in the planning process.

This Trading Venue (TV) outreach will be to discuss operational challenges arising from FX Trading Venues’ Brexit planning and share information on Trading Venues/banks needs and expectations in the planning process.

GFXD recommendations for the promotion of interoperability between new technologies and service providers.

To mark the launch of the FX Global Code, the GFMA Global FX Division, in conjunction with the Investment Association, the ACI and a number of other trade bodies, hosted an evening panel session with some of the key figures behind the development of the Code. Highlights from the 25 May 2017 event can be found below. 

The Global Foreign Exchange Division (GFXD) of the Global Financial Markets Association (GFMA) will be hosting two vendor outreach sessions of its Market Architecture Group and MiFID Working Group to discuss issues related to the implementation of MiFID.

The Global Foreign Exchange Division (GFXD) of the Global Financial Markets Association (GFMA) will be hosting a vendor outreach of its Market Architecture Group and MiFID Working Group to discuss issues related to the implementation of MiFID.

The MAG will start a new series of regular monthly industry outreach sessions, commencing in September 2014.

James Kemp, Managing Director of GFMA’s Global FX Division, provides a regulatory outlook for 2012 for FX Week.

Today AFME, FIA, GFXD, and ISDA have submitted a joint response to ESMA’s Call for Evidence on a comprehensive approach for the simplification of financial transaction reporting. We strongly support the policy objective to simplify regulatory frameworks and reduce operational burden and welcome ESMA’s efforts in this area. The response outlines a set of targeted recommendations including a clear delineation of reporting obligations by instrument, a shift to single-sided reporting, and a targeted review of reportable fields to ensure proportionality and efficiency across transaction reporting frameworks. These proposals aim to eliminate duplication, reduce costs, and align EU practices with global standards.

On July 28, the GFXD and ISDA submitted a joint response to the European Commission’s consultation on the need to exempt spot foreign exchange benchmarks under Article 18a of the EU Benchmarks Regulation. The consultation recommends applying the exemption to four currencies on the basis that their use in the EU either exceeds (Indian rupee, South Korean won, Taiwanese new dollar) or is very close to (Philippine peso) the significant benchmark threshold based on traded volume data provided by EU supervised entities. These four currencies meet the specific criteria identified in Article 18a – namely that, as restricted currencies, there is no suitable alternative benchmark produced in the EU, and they are used on a frequent, systematic and regular basis by end users to hedge their currency exposures. As part of the data analysis exercise undertaken for the consultation response, other non-central bank administered benchmarks that are not or do not expect to be authorized for use in the EU were considered but the data indicated their use in the EU is not significant. The joint response has received formal support from the European Association of Corporate Treasurers and the Deutsches Aktieninstitut.

GFMA's Commodities Working Group and Global Foreign Exchange Division, ISDA, UK Finance and EVIA responded jointly to the HMRC and HM Treasury technical consultation on the UK digital services tax.

GFMA FX Division Submits Letter to EC on Intragroup Margin Exemption Under EMIR

GFMA FX Division Submits Letter to APRA on Uncleared Margin Amendments in Australia

GFMA FX Division Submits Letter to the MAS on Basel III Reforms in Singapore

GFMA FX Division Signs Joint Association Letter to US Regulators on Final Phase of Initial Margin Phase-In

GFXD submitted a response to South Africa's Financial Sector Conduct Authority and Prudential Authority on margin requirements for non-centrally cleared OTC derivative transactions.

GFMA FX Division Signs Joint Association Letter to BCBS-IOSCO on Final Phase of Initial Margin Phase-In

GFXD submits comments to the European Commission on its consultation paper on the euro and market liquidity in foreign exchange markets.

GFMA FX Division Submits Comments to the US Agencies on their Notice of Proposed Rulemaking on 'Standardized Approach for Calculating the Exposure Amount of Derivative Contracts'

GFXD Submits Comments to the CFTC on its SEF Rules Proposal

GFMA FX Division and other Associations Submit Comments to the German Ministry of Finance on MiFID II/R

GFXD Submits Comments to the OSC on its Burden Reduction Notice

GFMA FX Division Submits Comments to the BCBS on its Consultative Document “Leverage ratio treatment of client cleared derivatives”

GFMA FX Division Submits Comments to KRX on its Trade Information Reporting System

GFMA FX Division Submits Comments to the CFTC, FDIC, Federal Reserve Board, OCC and SEC on their proposed changes to the Volcker Rule; Proposed Revisions to Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds.

GFMA FX Division Submits Comments to CPMI-IOSCO on its Consultation on Governance of Critical Data Elements.

GFMA's Global Foreign Exchange Division (GFXD) along with SIFMA, the International Swaps and Derivatives Association (ISDA), the American Bankers Association (ABA), and the Institute of International Bankers (IIB) provided comments to the Basel Committee on Bank Supervision and International Organization of Securities Commissions on Margin Requirements for Non-Centrally Cleared Derivatives – Final Stages of Initial Margin Phase-In.

GFMA FX Division Submits Comments to the FSB, BCBS, CPMI and IOSCO on their consultation on Incentives to Centrally Clear Over-the-Counter (OTC) Derivatives

GFMA FX Division Submits Comments to Hong Kong SFC on its Consultation on Margin Requirements for Non-centrally Cleared OTC Derivatives

GFMA FX Division, ISDA and AFMA Submit Comments to ASIC on the Exemptions found in ASIC Corporations (Derivative Transaction Reporting Exemption) Instrument 2015/844 

GFMA FX Division, ISDA and ASIFMA Submit Comments to Korean FSC on the Draft Bill for Introduction of Regulatory Framework for Financial Benchmarks 

GFMA FX Division and ISDA Submit Comments to the FSB on its Second Consultation on Governance Arrangements for the Unique Product Identifier  

GFMA FX Division Submits Comments to the European Commission on its Fitness Check on Supervisory Reporting.

GFMA FX Division Submits Comments to the European Commission on its Consultation on Post-Trade in a Capital Market Union 

GFMA FX Division Submits Comments to the Hong Kong TMA on the Application of Initial Margin to Physically-Settled FX Forward Contracts

The Global Foreign Exchange Division (GFXD) of GFMA welcomes the opportunity to comment on behalf of its members on the Consultation on the Governance arrangements for the unique product identifier issued by the Financial Stability Board (FSB) on the 3rd October 2017.

GFMA FX Division, AFME and ISDA Submit Comments to ESMA on Outstanding Uncertainties in the MiFIR Post‐Trade Transparency Framework 

GFMA FX Division Submits Comments to the Commodity Futures Trading Commission (CFTC) on its Request for Public Input on Simplifying CFTC Rules (Project KISS) – Clearing (RIN 3038–AE55)

GFMA FX Division Submits Comments to the Commodity Futures Trading Commission (CFTC) on its Request for Public Input on Simplifying CFTC Rules (Project KISS) – Reporting (RIN 3038–AE55) 

GFMA FX Division Submits Comments to the Commodity Futures Trading Commission (CFTC) on its Request for Public Input on Simplifying CFTC Rules (Project KISS) - Executing (RIN 3038–AE55)

GFMA FX Division Submits Comments to the Commodity Futures Trading Commission (CFTC) on its Request for Public Input on Simplifying CFTC Rules (Project KISS) – External Business Conduct Rules, Non-Cleared Margin Rules and Segregation of Independent Amount Requirements (RIN 3038–AE55)

GFMA FX Division Submits Comments to the South African Financial Services Board on its Draft Notice on Margin Requirements for OTC Derivatives 

GFMA FX Division and ISDA Submit Comments to ASIC, MAS, HKMA and SFC on the Implementation of the Unique Transaction Identifier (UTI)

GFMA FX Division Submits Comments to CPMI and IOSCO on their Consultative Report on the Harmonisation of Critical OTC Derivatives Data Elements (Other than UTI and UPI) – Third Batch 

GFMA FX Division Submits Comments to the CFTC on its Roadmap for its Review of Swap Reporting Rules

GFMA FX Division Submits Comments to the European Commission on its EMIR Amendment 

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to ASIC, HKMA, MAS and SFC on the Adoption of the CPMI-IOSCO Technical Guidance on Harmonisation of the Unique Transaction Identifier (UTI).

GFMA FX Division Submits Comments to the Central Bank of Russia on its Consultation on Mandatory Margining of Non-Centrally Cleared OTC Derivatives 

GFMA FX Division Submits Comments to ANNA-DSB on their ISIN Phase 2 Consultation Paper.

GFMA, the International Swaps and Derivatives Association (ISDA) and Japan Financial Markets Council (JFMC) responded to the Financial Stability Board (FSB) on FSB's consultation on Proposed Framework for Post-Implementation Evaluation of the Effects of the G20 Financial Regulatory Reforms.

The Global Foreign Exchange Division (GFXD) of GFMA and The International Swaps and Derivatives Association (ISDA) provide comments to the FSB on its consultation on Governance Arrangements for the Unique Transaction Identifier (UTI).

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to European Securities and Markets Authority (ESMA) on the MiFID II/MiFIR Discussion/Consultation Papers issued by ESMA on the 22 May 2014.

Additional information:
AFME Response to the Discussion and Consultation Papers

The Global Foreign Exchange Division (GFXD) of GFMA and The International Swaps and Derivatives Association (ISDA) provide comments to the Bank of Israel on its Trade Reporting Order 5776-2016 

The Global Foreign Exchange Division (GFXD) of the GFMA Signs Joint Association Letter to the European Commission on EMIR Trade Reporting.

GFMA (and its Global FX Division) along with the International Swaps and Derivatives Association (ISDA), the Investment Association, Financial Services Roundtable (FSR), the ABA Securities Association, and the American Council of Life Insurers signed a joint association letter to multiple regulators, policymakers and legislators on forbearance from uncleared swap margin requirements.

Individuals from the following all received this letter:

Authorité des Marchés Financiers 
Autorité de Contrôle Prudentiel et de Résolution (ACPR) 
Authoriteit financiele markten 
Bank of England 
Bank of Italy 
Bank of Spain 
Board of Governors of the Federal Reserve System 
Commodity Futures Trading Commission 
De Nederlandsche Bank 
Department of the Treasury/Office of the Comptroller of the Currency 
European Banking Authority 
European Central Bank 
European Commission 
European Insurance & Occupational Pensions Authority 
European Securities and Markets Authority 
Farm Credit Administration 
Federal Deposit Insurance Corporation 
Federal Financial Supervisory Authority (BaFin) 
Federal Housing Finance Agency 
Financial Conduct Authority 
Japan Financial Services Agency 
Office of the Superintendent of Financial Institutions

The Global Foreign Exchange Division (GFXD) of the GFMA and International Swaps and Derivatives Association  (ISDA) Submit Comments to ANNA-DSB on their ISIN Fee Model Consultation Paper.

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to ANNA-DSB on their ISIN Technology and Operations Consultation.

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to Korean Financial Supervisory Service (FSS) on its Guidelines on Margin Requirements for Non-Centrally Cleared OTC Derivatives.

GFMA FX Division Submits Comments to ESMA on its Consultation on Draft RTS on Package Orders under MiFI.

GFMA FX Division Submits Comments to the FCA on its Third Consultation Paper on MiFID Implementation CP16/29.

The Global Foreign Exchange Division (GFXD) of the GFMA Submits Comments to South Africa Reserve Bank on 15/8 Proposed Directive Issued in Terms of Section 6(6) of the Banks Act of 1990 regarding Margin Requirements for Non-centrally Cleared Derivatives 

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to CPMI and IOSCO on their Consultative Report on the Harmonisation of Critical OTC Derivatives Data Elements (Other than UTI and UPI) – Second Batch.

Please note: the PDF download includes the consultation paper with the GFXD response to each question; this is the mandated consultation format.

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to European Securities and Markets Authority (ESMA) on its Discussion Paper on the Trading Obligation for Derivatives under MiFIR

The Global Foreign Exchange Division (GFXD) of the GFMA Submits Comments to ASIC, HKMA and MAS on their Decision to Delay the UTI “Share and Pair” Requirement

The Global Foreign Exchange Division (GFXD) of the GFMA, FIA, ISDA and ICMA Submit Comments to the European Commission and ESAs on the presentation, content, review and revision of key information documents under PRIIPs 

GFMA FX Division Submits Comments to CFTC on the Swap Clearing Requirements Pursuant to Section 2(h)(2)(D) of the Commodity Exchange Act 

GFMA FX Division Submits Comments to CPMI and IOSCO on their second Consultative Report on the Harmonisation of the Unique Product Identifier (UPI) 

The Global Foreign Exchange Division (GFXD) of the GFMA, ISDA and ICMA Submit Comments to the FCA on its Consultation Paper CP16/18 on Changes to Disclosure Rules in the FCA Handbook to Reflect the Direct Application of the PRIIPs Regulation 

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Central Bank of Russia on its Consultation Paper on Mandatory Clearing of Standardised OTC Derivatives 

The Global Foreign Exchange Division (GFXD) of the GFMA and ISDA provides comments to ASIC on Foreign Privacy Restrictions (Exemption 5) under ASIC Corporations (Derivative Transaction Reporting Exemption) Instrument 2015/844 

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to ASIC on the Treatment of Securities Conversion Transactions under the ASIC Corporations (Derivative Transaction Reporting Exemption) Instrument 2015/844 

The Global Foreign Exchange Division (GFXD) of the GFMA Submits Comments to the South African National Treasury on the Third Draft of the Ministerial Regulations on Regulating OTC Derivative Markets

GFMA provided comments to regulators on a request for postponement of margin requirements for uncleared swaps for phase 1 covered swap entities. Individuals from the CFTC, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve System, Federal Housing Finance Agency and Farm Credit Administration Board all received this letter.

GFMA provided comments to legislators, policymakers and regulators on Packaged Retail and Insurance-based Investment Products regulation (PRIIPs) and Foreign Exchange Forwards. Individuals from the European Parliament, European Commission, ESMA, EBA, EIOPA, AMF, BaFIN and FCA all received this letter. 

GFMA FX Division Submits Comments to CPMI and IOSCO on the Identification of the "Direction" (Payer/Receiver) for a FX Swap and a FX Forward. 

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to Australian Prudential Regulation Authority (APRA) on the Treatment of Securities Conversion Transactions under the Margin and Risk Mitigation Standards.

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Hong Kong Monetary Authority (HKMA) on the Treatment of Securities Conversion Transactions under the Margin and Other Risk Mitigation Standards

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Reserve Bank of India on its Discussion Paper on Margin Requirements for Non-Centrally Cleared Derivatives.

The Global Foreign Exchange Division (GFXD) provides comments to Australian Prudential Regulation Authority (APRA) on its Discussion Paper on Margining and Risk Mitigation for Non-Centrally Cleared Derivatives 

The Global Foreign Exchange Division (GFXD) provides comments to the European Commission on the Final Draft Regulatory Technical Standards for Margin Requirements for Non-Centrally Cleared Derivatives.

The Global Foreign Exchange Division (GFXD) of the GFMA signs joint Association letter ‘Improving Derivatives Transparency: The Merits of an Entity-based Reporting Framework’ 

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to ESMA on its Consultation Paper on Guidelines on Transaction Reporting, Reference Data, Order Record Keeping & Clock Synchronisation

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Commodity Futures Trading Commission (CFTC) on its consultation on Draft Technical Specifications for Certain Swap Data Elements 

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to Committee on Payments and Market Infrastructure (CPMI) and Board of the International Organisation of Securities Commissions (IOSCO) on their Consultative Report on the Harmonisation of the Unique Product Identifier (UPI).

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Monetary Authority of Singapore on its Consultation Paper on Proposed Amendments to the Securities and Futures (Reporting of Derivative Contracts) Regulations

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Hong Kong Monetary Authority (HKMA) on its Consultation Paper on Non-Centrally Cleared OTC Derivative Transactions – Margin and Other Risk Mitigation Standards.

The Global Foreign Exchange Division (GFXD) of the GFMA and International Swaps and Derivatives Association, Inc. (ISDA) provide comments to the Ontario Securities Commission (OSC), Autorité des marchés financiers (AMF) and Manitoba Securities Commission (MSC) on Changes to their Respective 91-507 Regulations and to the AMF on Changes to its 91-506 Regulation on Trade Reporting.

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Hong Long Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) on the proposed reporting fields in their Consultation Paper Introducing Mandatory Clearing and Expanding Mandatory Reporting.

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Monetary Authority of Singapore (MAS) on their Policy Consultation on Margin Requirements for Non-Centrally Cleared OTC Derivatives.

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) on their Consultation Paper Introducing Mandatory Clearing and Expanding Mandatory Reporting

The Global Foreign Exchange Division (GFXD) of the GFMA, the International Swaps and Derivatives Association (ISDA) and the Investment Association (IA) provide comments to CPMI and IOSCO on their Consultative Report on the Harmonisation of Key OTC Derivatives Data Elements (other than UTI and UPI).

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) on their Consultative Report on the Harmonisation of the Unique Transaction Identifier (UTI)

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the European Commission’s Public Consultation on Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories

The Global Foreign Exchange Division (GFXD) of the GFMA provides comments to the Monetary Authority of Singapore (MAS) on its Consultation Paper on Draft Regulations for Mandatory Clearing of Derivatives Contracts issued by the MAS on 1 July 2015.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the  European Securities and Markets Authority (ESMA) on the questions listed in the ESMA Addendum Consultation Paper on MiFID II/MiFIR (Issued on the 18 February 2015).

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Monetary Authority of Singapore (MAS) on the Policy Consultation on Regulatory Framework for Intermediaries Dealing in OTC Derivative Contracts, Execution-Related Advice, and Marketing of Collective Investment Scheme issued by MAS on 3 June 2015.

GFMA and The Financial Services Roundtable (FSR) provide comments to the Commodity Futures Trading Commission (CFTC) requesting time-limited relief for swap dealers to comply with CFTC Regulation 23.504 (STRD Rule) in connection with deliverable foreign exchange (FX) swaps and foreign exchange forwards. 

While the current FX industry best practice is to document transactions with their counterparties in Exempt FX Products, it is not universal for the reasons described in this letter. Because of the significant number of institutions that trade Exempt FX Products that are not covered by Compliant Documentation, the lack of awareness that the STRD Rule applied to Exempt FX Products, and the lengthy negotiations necessary to enter into new documentation (because such documentation does not exist, or to amend existing documentation to bring Exempt FX Products within scope), many institutions will be unable to satisfy the STRD Rule by July 1, 2013.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Canadian Securities Administrators (CSA) on the CSA Proposed National Instrument 94-101 and Companion Policy – Mandatory Central Counterparty Clearing of Derivatives.

The Global Foreign Exchange Division (GFXD) of GFMA provides comment to the European Securities and Markets Authority (ESMA) on the Consultation Paper issued by ESMA on 10 November 2014.

The Global Foreign Exchange Division (GFXD) of GFMA provided comments to the US prudential authorities and CFTC on (re)proposed margin rules on uncleared swaps.

The GFXD supports the Agencies’ efforts to establish margin requirements which would help ensure the safety and soundness of covered swap entities and would be appropriate for the risk to the financial system associated with non-cleared swaps held by such entities. The GFXD views the proposed margin regime in the U.S. as achieving the international regulatory framework’s goal of promoting global consistency and reducing regulatory arbitrage opportunities with respect to the treatment of physically-settled OTC FX forwards and swaps, specifically that (i) initial margin not apply to these contracts and (ii) variation margin be applied via supervisory guidance or national regulation.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to European Securities and Markets Authority (ESMA) on the Consultation Paper on the Clearing Obligation under EMIR (no. 3) -- FX NDFs on 06 November 2014.

The Global Foreign Exchange Divisions (GFXD) of GFMA provides comment to the FSB FX Benchmark Working Group on its consultative document on FX benchmarks.

The Global Foreign Exchange Division (GFXD) of GFMA provided comments to the Australian Securities and Investments Commission's (ASIC) on its Consultation Paper 221: OTC derivatives reform, regarding proposed amendments to the ASIC Derivative Transaction Rules (Reporting) 2013.

 The Global Foreign Exchange Division (GFXD) of GFMA provides comments  on the Consultation Paper issued by the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) on 18 July 2014.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments on the Consultation Paper P010-2014 issued by the Monetary Authority of Singapore (MAS) on on 9 July 2014.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), European Securities Markets Authority (ESMA) on the Consultation Paper on draft regulatory technical standards on risk-mitigation techniques for OTC-derivative contracts not cleared by a CCP under Article 11(14) or Regulation (EU) No 648/2012 published by the EBA, EIOPA and ESMA (Authorities).

The Global Foreign Exchange Divisions (GFXD) of GFMA provides comment on the Commission's Review of Swap Data Recordkeeping and Reporting Requirements.

The GFXD recommends that the CFTC considers the implications, financial and otherwise, of any recommendations that the CFTC may make to its existing part 45 requirements as a result of this Request for Comment. We also urge the CFTC to align any recommended changes to those recently recommended by the GFXD in our response to the FSB's Consultation Paper regarding the aggregation of OTC derivatives data.

The Global Foreign Exchange Divisions (GFXD) of GFMA provides comment to the European Commission on its consultation document on FX financial instruments.

 Because transactions in FX spot, alongside FX swaps and FX forwards, are integral to the global payment system, international trade, cross-border activity and monetary policy, it is essential that the smooth functioning of the FX market not be disrupted. For these reasons, we wish to emphasize the importance in ensuring that the regulatory treatment of FX products within the European Union – and across multiple jurisdictions globally – is consistent.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the European Commission and the European Securities and Markets Authority (ESMA) on consistent regulatory treatment for incidental foreign exchange (FX) transactions related to foreign securities settlement, commonly known as, “FX Security Conversions.”

As part of the clarification and as an interim step, the GFXD asks the European Commission to consider an FX transaction that is entered into solely to effect the purchase or sale of a foreign security (FX Security Conversions) – to be a bona fide spot transaction in situations where the settlement period is greater than two days.

To do so, the GFXD requests the European Commission and National Competent Authorities in the EU to confirm that FX Security Conversions are not financial instruments under the Markets in Financial Instruments Directive (MiFID). This would also have the effect of ensuring that FX Security Conversions are not subject to the European Markets infrastructure Regulation (EMIR). The GFXD has continually requested consistent global treatment for FX Security Conversions, and this would bring Europe into convergence with the US and Canada.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Canadian Securities Administrators' (CSA) Consultation Paper, Proposed Model Provincial Rule on Mandatory Central Counterparty Clearing of Derivatives, CSA Consultation Paper 91-303.  

The GFXD generally supports the Proposed Model Rules in their current form but wish to draw the CSA’s attention to specific areas of the Proposed Model Rules as they relate to the global FX market.

The Global Foreign Exchange Division (GFXD) of GFMA, on behalf of Bloomberg SEF LLC, ICE Swap Trade, LLC, INFX SEF, Inc.,  MarketAxess SEF Corporation,  SwapEx, LLC, TeraExchange, LLC,  360T Trading Networks Inc.,  and Thomson Reuters (SEF) LLC,  provides comments to the Division of Marketing Oversight of  Commodity Future Trading Commission (CFTC) requesting that the Division confirm that it will not recommend that the Commission commence an enforcement action against a swap execution facility (SEF) that has failed prior to January 1, 2015 to comply with the requirements of Commission regulations in connection with swap transactions executed on the SEF that are not required or intended to be submitted for clearing (Non-Cleared Swaps), provided that the SEF has complied with the conditions applicable to it under this letter.

GFXD believes that, if granted, the no-action relief (NAR) requested in this correspondence would largely mitigate the legal uncertainties that have contributed to the continued reluctance on the part of market participants to trade Non-Cleared Swaps on SEFs, and would help foster an orderly transition to the SEF marketplace for Non-Cleared Swaps as the Interdivisional Working Group completes its work.

The Global Foreign Exchange Division (GFXD) of the Global Financial Markets Association (GFMA) provides comments to the Financial Stability Board - Aggregation Feasibility Study Group of the Bank for International Settlements regarding the Consultation Paper on the Feasibility study on approaches to aggregate OTC derivatives data issued by the Financial Stability Board (FSB) on February 4th, 2014.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Securities Commission Malaysia (SC), Bank Negara Malaysia (BNM) and Perbadanan Insurans Deposit Malaysia (PIDM) (collectively the Regulatory Agencies) on the Joint Public Consultation Paper on Trade Repository Reporting Requirement for Over-the-Counter Derivatives.

Many of the current legislative and regulatory reforms will have a significant impact upon the operation of the global FX market and GFXD feels it is vital that the potential consequences are fully understood and that new regulation improves efficiency and reduces risk, not vice versa.

GFXD is supportive of the approach outlined in the joint consultation paper and provide specific comments with respect to the requirements and your questions. In addition, GFXD particularly welcomes the Regulatory Agencies' to harmonise reporting requirements under the regime with those that will apply internationally.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Commodity Futures Trading Commission (CFTC)  request time-limited relief certain provisions of CFTC regulations:  (1) Part 37 relating to swap execution facilities (SEFs); (2) Part 43 (real-time reporting); or (3) Part 45 (trade reporting) – in each case, as may be applicable to the trading of FX products on these platforms solely in connection with FX products which are not currently subject to a clearing requirement so long as such entity complies with an alternative compliance schedule.

GFMA supports continued discussions between the CFTC and swaps market participants on the best manner to timely effect the migration of swaps trading activity from existing venues to regulated SEF platforms.  However, in light of the fast approaching compliance date and the many technological, operational and legal hurdles that still need to be overcome within this short timeframe, we believe time-limited relief is warranted.

SIFMA AMG Submits Comments to the CFTC Requesting Relief Relating to SEF Implementation and Swap Trade Execution (23 September 2013)

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the European Securities and Markets Authority (ESMA) in response to the Discussion Paper on the Clearing Obligation under the European Market Infrastructure Regulation (EMIR), ESMA/2013/926. 

Given the global nature of the Foreign Exchange (FX) market, GFMA emphasizes the importance in ensuring that the regulatory treatment of FX products in multiple, global jurisdictions remains consistent. GFMA shares its recommendations are responses to questions including the detailed rationale behind the exemption to any central clearing obligation of deliverable over-the-counter (OTC) FX forwards and swaps by the U.S. Department of Treasury. GFMA strongly recommends that ESMA follow a similar approach by not issuing a clearing obligation for such products.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Canadian Securities Administrators (CSA) in response to the CSA Consultation Updated Model Rules - Derivatives: Product Determination and Trade Repositories and Derivatives Data Reporting, CSA Staff Notice 91-302.  The GFXD broadly supports the proposed approach outlined in the Updated Model Rules and, specifically, the various amendments made to reflect GFMA's earlier comments on the Draft Model Rules.  GFMA offers recommendations limited to key issues which they believe remain, or are newly raised in the CSA Consultation.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Canadian Securities Administration (CSA) on the CSA Consultation Paper 91-301 – Model Provincial Rules – Derivatives: Product Determination and Trade Repositories and Derivatives Data Reporting.  GFXD broadly supports the proposed approach outlined in the Model Rules and welcomes the recognition and allowances made for parties and transactions covered by the Model Rules to be reported to foreign-based trade repositories. GFXD also welcomes the efforts by the CSA to harmonise reporting requirements under the TR Rules with those that will apply internationally and the ability to apply for exemptions on the grounds of equivalency.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the Monetary Authority of Singapore (MAS) on the Consultation Paper on Draft Regulations Pursuant to the Securities and Futures Act (SFA) for Reporting of Derivatives Contracts, P006-2013-June 2013.  The GFXD is supportive of the approach outlined in the consultation paper and provide specific comments with respect to the requirements and the questions posed by the MAS. The GFXD  particularly welcomes the MAS's efforts to harmonise reporting requirements under the regime with those that will apply internationally.

GFMA's Global Foreign Exchange Division (GFXD) authored a briefing note on the impact of the proposed European Union Financial Transaction Tax (FTT) on Foreign Exchange (FX) markets.

The related Press Release is available at the following link:
http://www.gfma.org/News/Item.aspx?id=494

Executive Summary

 The Foreign Exchange (FX) market underpins international commerce and investment by allowing governments, businesses, investors and individuals to convert one currency to another. In addition to FX Spot transactions, other FX Products (FX forwards, NDFs, FX swaps, FX options) enable participants to transact with certainty over the exchange rate and therefore the value of the transaction, whether for issuing a bond to international investors, purchasing raw materials abroad, exporting goods overseas, or protecting the value of pension investments made in other currencies. 

Europe is focused on restarting economic growth. The ability of European companies of all sizes to remain active on the global scene - by exporting European goods while securing a stable income at home despite volatility in currency markets - is crucial to this economic growth. FX Products are central to that ability.

To preserve the usefulness of FX markets, the proposed Financial Transaction Tax (FTT) should not create barriers or prevent European companies and investors from being active in international commerce and investment. The inclusion of these FX Products in the scope of any FTT would significantly raise the cost for end-users if they are to remain active in international commerce. Our analysis shows:

• For EU corporates, their FX transaction costs will rise by up to 700%. With just a single dealer a corporate based in the tax zone could see its annual FX transactions costs rise from $2.4m to $20.4m.
• For a pension fund or fund manager, the impact is even greater, due to the double-sided nature of the proposed tax. These users could see their transaction costs rise by around 1,500% and possibly by as much as 4,700%. For a pension fund manager whose annual FX transaction costs with a single dealer are currently $1.6m, this will mean that, once taxed, transaction costs would exceed $75m.

Imposing an FTT on these FX Products (FX forwards, NDF, FX swaps, FX options) may well cause companies and investors to move away from hedging the risk of their international activities, increasing their earnings volatility and business risk or pushing up costs that will reduce returns for investors. It risks discouraging them from being active in international commerce or creating costs that are a drain on firms’ financial resources that they could otherwise have deployed to fund their growth plans.

The European Commission3 has already recognised that including FX spot transactions in the FTT would infringe the movement of capital under The Treaty on the Functioning of the European Union and in 2011 raised concerns with regards including other FX Products. Given these other FX Products are used for the same purposes as spot transactions - for payments, investing and funding - we suggest that these FX Products – FX swaps, forwards, options and NDFs - should, as is already the case in relation to FX spot transactions, be excluded from the scope of any FTT proposal.

 GFMA provides comments to the Australian Securities and Investments Commission (ASIC ) on their Consultation Paper 205: Derivative transaction reporting.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the U.S. Commodity and Futures Trading Commission (CFTC) on on the proposal made by the Chicago Mercantile Exchange Inc. (CME) in its amended submission # 12-391R dated December 6, 2012, which requests the CFTC to approve of a new Chapter 10 and Rule 1001 (the Proposed Rule) of the CME's Swap Data Repository (SDR) rulebook.

GFMA believes that the CFTC should not approve the Proposed Rule for multiple reasons, including that the Proposed Rule, which would require all swaps cleared with the CME to be reported to the CME's SDR, violates the “fair and open access” principle of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

GFMA emphasizes that the concerns raised in this letter are not exclusive to the CME and the Proposed Rule, but apply generally to any designated clearing organization (DCO) that seeks to require all swaps cleared with it to be reported to a specific swap data repository (SDR). 

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the U.S. Department of Treasury (Treasury) on Treasury's determination (Proposed Determination) to exempt foreign exchange swaps and forwards from the definition of a “swap” under the Commodity Exchange Act (the CEA) pursuant to the authority granted to the Secretary of Treasury under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act).  The GFXD offers its observations in support of the Proposed Determination.

The Global Foreign Exchange  Division (GFXD) of GFMA provides comments to the U.S. prudential regulators on the proposed margin and capital requirements for covered swaps entities, Board Docket No. R-1415, OCC-2011-0008, FDIC RIN 3064-AD79, FHFA RIN 2590-AA45, FCA RIN 3052-AC69.  The Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, and the Farm Credit Administration (collectively, the Agencies) have reopened the comment period on the Proposed Margin Rule in light of the consultative document on margin requirements for non-centrally-cleared derivatives (Consultative Document)  published for comment by the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (IOSCO).  Since GFMA believes the Dodd-Frank Act achieves the correct policy outcome with respect to foreign exchange swaps and foreign exchange forwards, the group asserts that extending a margin regime for uncleared swaps to these two foreign exchange products as contemplated by the Consultative Document is not appropriate, and is not consistent with the established and proven strategy of central banks, in consultation with supervisors, for addressing systemic risk in this market. 

The Global Foreign Exchange Division of GFMA provides comment on the consultative document on margin requirements for non-centrally-cleared derivatives issued by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) joint Working Group on Margin Requirements (WGMR).

The Global FX Divsion of GFMA provides responses to the Canadian Securities Administrators (CSA) on the CSA Consultation Paper 91-406 –Derivatives: OTC Central Counterparty Clearing (20 June 2012).  In addtion to its comments, the Global FX Division notes that many of the current legislative and regulatory reforms will have a significant impact upon the operation of the global FX market and we feel it is vital that the potential consequences are fully understood and that new regulation improves efficiency and reduces risk, not vice versa.

The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the European Securities Markets Authority (ESMA) on the the Discussion Paper relating to draft technical standards for the regulation of OTC derivatives, central counterparties (CCPs) and trade repositories.

The Global FX Division (GFXD) of GFMA provides comments to the The Treasury of the Commonwealth of Australia on the implementation of a framework for Australia’s G20 over-the counter derivatives commitments (Consultation Paper, April 2012).  Many of the current legislative and regulatory reforms will have a significant impact upon the operation of the global FX market and the GFXD feels it is vital that the potential consequences are fully understood and that new regulation improves efficiency and reduces risk, not vice versa. The GFXD is committed to ensuring a robust, open and fair market place and shares its views in response to the  consultation paper.

The Global FX Division of GFMA and the American Bankers Association (ABA) provide comments to multiple U.S. federal regulators requesting clarification or, in the alternative, relief regarding certain foreign exchange (FX) transactions with counterparties that are not within the definition of “eligible contract participants,” or “ECPs,” under the Commodity Exchange Act. Specifically, the groups ask that the U.S. federal regulators confirm that FX transactions that are solely incidental to, and are initiated for the sole purpose of permitting a client to complete a transaction in, a foreign security are not subject to the regulators’ retail FX rules developed to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).

The Global FX Division provides comments to the Canadian Securities Administrators on their Consultation Paper 91-401 on Over-The -Counter Derivatives Regulation in Canada.  GFMA responds to those questions in the Consultation Paper, where they have a specific comment to make in regard to the foreign exchange (FX) market.

The Global FX Division provides comments to the Commodity Futures Trading Commission (CFTC) on confirmation, portfolio reconciliation and portfolio compression requirements for swap dealers and major swap participants, RIN 3038-AC96 – 17 CFR Part 23.  The proposal would implement provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).  The Global FX Division notes there are some specific challenges that face the foreign exchange industry when compared to other asset classes, namely the high volume of transactions and the wider universe of participants. These arise because the foreign exchange market forms the basis of the global payments system. These two issues provide a practical challenge in ensuring that all relevant trades and counterparties are able to comply with any proposed rules.

GFMA provides comments to the Commodity Futures Trading Commission (CFTC) on real-time public reporting of swap transaction data, RIN 3038-AD08 – 17 CFR Part 43. In the proposed rulemaking, the CFTC asks for specific data and analysis to support the block trades proposal. At this time, it is difficult to provide such statistical analysis given that there are no central bodies responsible for collecting sufficiently granular detail – an issue that swap data repositories (SDRs) are in part intended to address. GFXD therefore advocates an approach that allows the CFTC flexibly to assess the appropriate methodologies for determining swap categories, block sizes and cap sizes.

GFMA provides comments to the European Securities and Markets Authority (ESMA) on the discussion paper regarding draft technical standards for the regulation of OTC derivatives, central clearing counterparties (CCPs) and trade repositories.  Many of the current legislative and regulatory reforms will have a significant impact upon the operation of the global FX market and we feel it is vital that the potential consequences are fully understood and that new regulation improves efficiency and reduces risk, not vice versa.

GFMA provides comments to the Monetary Authority of Singapore (MAS) the consultation paper issued regarding the proposed regulation of OTC Derivatives.  Many of the current legislative and regulatory reforms will have a significant impact upon the operation of the global foreign exchange (FX) market and we feel it is vital that the potential consequences are fully understood and that new regulation improves efficiency and reduces risk, not vice versa.

GFMA's European affiliate, the Association for Financial Markets in Europe (AFME), authored a briefing note on the European Commission's 2010 review of the Markets in Financial Instruments Directive (MiFID), specifically in regards to transparency in foreign exchange derivatives.

Background: 

As part of its 2010 review of the Markets in Financial Instruments Directive (MiFID), the European Commission is expected to propose legislation extending transparency requirements into the non‐equities markets. The Committee of European Securities Regulators (CESR) will provide technical advice to the Commission in the context of non‐equities markets transparency and has consulted on the following markets: Corporate Bonds, Structured Finance products (ABS and CDOs), Credit Default Swaps (CDS) and Derivatives (Interest Rate, Equity, Commodities and Foreign Exchange).

AFME’s general position on all aspects of non‐equities transparency apart from structured finance is set out in Briefing Paper [BN10‐03]. This paper specifically covers the market in Foreign Exchange (FX) Derivatives.

The Global Foreign Exchange Division (GFXD) welcomes the opportunity to comment on the Hong Kong Monetary Authority (HKMA) consultation regarding the Hong Kong Trade Repository (HKTR). On behalf of its members, the GFXD would like to take the opportunity to comment on a number of issues around the implementation of a trade repository for foreign exchange transactions and to continue our recent discussions with you in more detail with the aim of aligning and coordinating development work as closely as possible to the benefit of both regulators and industry.

The Global Foreign Exchange Division (GFXD) and Managed Funds Association (MFA) are concerned the proposed eligible contract participant (ECP) definition will cause substantial disruptions to markets and investors. 

See Also: GFMA and MFA Submit Comments to the CFTC and SEC on Safe Harbor Provisions for the Definition of Eligible Contract Participants (19 January 2012) 

GFMA’s Global Foreign Exchange Division (GFXD) and the Managed Funds Association (MFA) submit a proposed safe harbor to the CFTC’s proposed rule interpreting the definition of “eligible contract participant” (ECP) contained in the Commodity Exchange Act (the “CEA”). We urge the CFTC and the SEC to adopt the Proposed Safe Harbor as a new final paragraph of the Proposed CFTC ECP Rule.

See also: GFMA and MFA Submit Comments to the CFTC and SEC on the Definition of Eligible Contract Participant (10 January 2012) 

GFMA provides comments to the Secretary of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency regarding a request for different standards for “Professional” retail foreign exchange investors and the right to opt-in under the new retail forex rules.

The Global FX Division authored a briefing note on the European Commission's proposed regulation on OTC derivatives, central counterparties and trade repositories, specifically in regards to the treatment of FX instruments under EMIR.

Introduction:

This note sets out the position of the Global FX Division of AFME, SIFMA and ASIFMA regarding the treatment of FX instruments under the proposed regulation covering OTC derivatives, central counterparties and trade repositories, commonly known as EMIR.

With a turnover of some EUR2.9 trillion / US$4 trillion per day the FX market is the world’s largest financial market. It is the means by which cross border payments are effected and currency risk is managed in the world’s financial system. It differs from the OTC derivative markets in that it has many more participants and transactions, which are much simpler and short term. We are therefore concerned with treating the vast majority of FX transactions, which are simple exchanges of currency, as if they are “derivatives”.

GFMA's European affiliate, the Association for Financial Markets in Europe (AFME), authored a briefing note on the Markets in Financial Instruments Directive (MiFID), specifically in regards to foreign exchange.
 

Introduction:
 

The Markets in Financial Instruments Directive (MiFID) was designed to bring efficiency to the European Equity market through competition and to ensure that investor protection was consistently achieved across national boundaries. The MiFID review has now been significantly expanded and introduces new requirements for non‐equity products.

FX trading is a 24‐hour market that underpins international trade and investing. The $4 trillion per day market, its ubiquitous nature, and the simplicity of the vast majority of products mean that it has already developed into a highly transparent, liquid and deep marketplace. Market structures have similarly evolved to ensure access, transparent pricing and end user choice. Preserving these aspects are key to ensuring that such end users are able to hedge commercial risks efficiently and in a bespoke manner.

The proposed application of MiFID to FX should be carefully considered in the light of the market’s global nature and structure and that many of the objectives of MiFID are already met by the market.

We are concerned that a broad expansion of ‘equities‐style’ regulation to capture FX raises the risk of unintended consequences. We urge the Commission to review MiFID’s objectives in the specific context of the FX market to ensure that any measures are appropriately and efficiently tailored.

The Association for Financial Markets in Europe (AFME) welcomes this consultation paper from the Committee of European Securities Regulators on standardisation and exchange trading of OTC derivatives, and the opportunity to respond. AFME’s Foreign Exchange (FX) Division comprises 21 global FX market participants, collectively representing more than 85% of the FX market.

The FX market is the world’s largest financial market. Effective and efficient exchange of currencies underpins the world’s entire financial system. As many of the current proposals may have a significant impact upon the operation of the global FX market it is vital that the potential consequences of regulatory action are fully understood and that new regulation improves efficiency and reduces risk, not vice versa.

We are aware of the joint response to this paper being submitted by AFME, BBA, ISDA, ASSOSIM and the NSA and are supportive of the views set out in their paper. We have sought here to focus on responses to the points within the consultation paper that are of particular relevance to the FX market.

The Global Foreign Exchange Division (GFXD) welcomes the opportunity to comment on the Canadian Securities Administrators Consultation Paper 91-402 regarding trade repositories. On behalf of its members, the GFXD would like to take the opportunity to set out a number of issues around the implementation of a trade repository for foreign exchange transactions and to respond on the specific questions raised in the document. The GFXD would also welcome the opportunity to discuss these in more detail with you with the aim of aligning and coordinating development work as closely as possible to the benefit of both regulators and industry.

The Global Foreign Exchange Division (GFXD) welcomes the opportunity to comment on behalf of its members on the Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) consultation on the proposed regulatory regime for OTC derivatives.

The FX market is the world’s largest financial market. Effective and efficient exchange of currencies underpins the world’s entire financial system. Corporations and investors regularly participate in the market for operational needs: to reduce risk by hedging currency exposures; to convert their returns from international investments into domestic currencies; and to make cross-border investments and raise finance outside home markets.

On 28th September 2011 European Commission President José Manuel Barroso unveiled the EU Commission’s proposal for an EU wide Financial Transaction Tax (FTT) which would take effect from 1st January 2014. The tax would be levied on all securities and derivative transactions executed within the EU. For Foreign Exchange (FX) instruments spot has been exempted from taxation, however cash (defined as FX forwards and swaps) and derivatives (defined as options) have been included.

 This study evaluates the impact of the proposed EU Financial Transaction Tax on European FX markets. We aim to quantify the impacts of the FTT on FX cash and derivative markets, both in terms of the transaction costs and the effects on the participants in these markets. Previous studies have shown that introducing an FTT results in the primary impacts of an increase in the cost to transact, geographic relocation of trading, substitution and a general reduction in notional turnover. In addition, the secondary impacts are a reduction in liquidity and increased market inefficiencies. This can lead to an increase in short-term price volatility and widening bid/ask spreads.

 

The Global Foreign Exchange Division (‘GFXD’) welcomes the opportunity to comment on
Gretai’s recently issued specifications document for a cross-asset class trade repository. On behalf of its members, the GFXD would like to take the opportunity to comment on a number of issues around the implementation of a trade repository for foreign exchange transactions and to discuss these in more detail with you with the aim of aligning and coordinating development work as closely as possible to the benefit of both regulators and industry.

The GFXD welcomes the goals of enhancing regulatory oversight and promoting greater
transparency. It is working with its members to implement a trade repository for the FX industry that aims, to the greatest extent possible, to meet global regulatory needs.

Its members recently announced their recommendation to partner with DTCC and Swift to develop a global foreign exchange trade repository. This selection was the result of an extended evaluation, Request for Information (RFI) and public Request for Proposal (RFP) process that began back in December 2010, with the RFP issued in April 2011.

The project is currently in the scoping phase and key work areas will cover overall functionality, technology, connectivity, messaging and data formats amongst other areas. However, this must crucially be framed in the context of understanding how the needs of multiple regulators can be met. The GFXD would welcome the opportunity to discuss this in more detail with you.

The Global Foreign Exchange Division welcomes the opportunity to submit comments to the Reserve Bank of Australia regarding the OTC Derivatives Central Clearing Consultation Discussion Paper dated June 2011.

The discussion document seeks comment with regard to whether central clearing is appropriate for certain classes of derivatives. In respect of foreign exchange transactions, we have significant concerns about introducing any clearing requirement and welcome the Council agencies’ recognition that clearing may only be appropriate for certain, limited, FX products, namely options. Even with respect to options, we believe it is unclear whether the FX options market, given its size in Australia, poses sufficient systemic risk to justify implementation of a local CCP. We also agree with the Council agencies’ belief that products subject to a clearing mandate should, as much as possible, be harmonised with other jurisdictions’ requirements. This is particularly relevant given the global nature of the FX market and the level of trade conducted with off-shore market participants.

Ultimately, we believe that these transactions, and in particular FX forwards and swaps, should be excluded from the requirements of mandatory clearing. We believe the applicability of clearing to the FX options market requires further analysis, in terms of the structure of any CCP and the potential risk and liquidity requirements associated with it. The FX industry has been working with regulators, central banks and CCPs in the context of the CPSS IOSCO Principles for Financial Market infrastructures to understand the key challenges faced in clearing FX options in order to help inform market solutions in this regard.

The Global FX Division (“Global FX Division”) of SIFMA, AFME and ASIFMA appreciates the opportunity to share our views on the appropriateness of an exemption for foreign exchange (“foreign exchange” or “FX”) swaps and foreign exchange forwards from the definition of a “swap” under the Commodity Exchange Act (the “CEA”) pursuant to the authority granted to the Secretary of the Treasury (the “Secretary”) under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. For the reasons discussed in this letter, we strongly believe that an exemption is warranted.

The Association for Financial Markets in Europe (AFME) welcomes this consultation paper from the European Commission on derivatives and market infrastructures, and appreciates the opportunity to respond. AFME’s Foreign Exchange (FX) Division comprises 21 global FX market participants, collectively representing more than 85% of the FX market.

The FX market is the world’s largest financial market, and effective and efficient exchange of currencies underpins the world’s entire financial system. As many of the current legislative proposals may have a significant impact upon the operation of the global FX market it is vital that the potential consequences of regulatory changes are fully understood, and that new regulation improves efficiency and reduces risks, not vice versa. The following comments summarise our observations on the points within the consultation paper that are of particular relevance to the FX market.

The Global FX Division provides comments to the Bank for International Settlements (BIS) and the International Organisation of Securities Commissions (IOSCO) on the Consultative Report on OTC derivatives data reporting and aggregation requirements, Aug 2011.  The Global FX Division notes the selection of a preferred partner for trade repository services arises from the general preference of the industry for the use of global trade repositories, rather than multiple, fragmented local repositories. This is because they provide the chief benefits of enhanced regulatory oversight and efficiency of data capture. This is particularly the case for the FX market which is characterised by vastly higher number of transactions and participants when compared to other asset classes given its position as the basis of the global payments system.

GFMA provides comments to the U.S. Commodity Futures Trading Commission (CFTC) on swap data recordkeeping and reporting requirements for pre-enactment and transition swaps (also known as historic swaps), as issued by the Commission to implement provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Members of the Global Foreign Exchange Division (GFXD) are committed to supporting the establishing of an single data repository (SDR) to accommodate the foreign exchange asset class.

The Global Foriegn Exchange Division (GFXD) of GFMA provides comments to the Commodity Futures Trading Commission (CFTC) on swap data repositories, swap data recordkeeping and reporting requirements,  real-time public reporting of swap transaction data, RIN 3038-AD20 – 17-CFR Part 49, RIN 3038-AD19 – 17-CFR Part 45, RIN 3038-AD08 – 17 CFR Part 43.  This letter is supplemental to GFXD's previous submissions on the proposed swap data repository (SDR) rules and is intended to clarify and further explain certain comments.
 

The Association for Financial Markets in Europe (AFME) welcomes the Committee on European Securities Regulators' consultation paper on transaction reporting on OTC derivatives and extension of the scope of transaction reporting obligations, and the opportunity to respond. AFME’s Foreign Exchange (FX) Division comprises 21 global FX market participants, collectively representing more than 85% of the FX market.

The FX market is the world’s largest financial market. Effective and efficient exchange of currencies underpins the world’s entire financial system. As many of the current proposals may have a significant impact upon the operation of the global FX market it is vital that the potential consequences of regulatory action are fully understood and that new regulation improves efficiency and reduces risk, not vice versa.

We are aware of the joint response to this paper being submitted by AFME, ISDA and& ASSOSIM and are supportive of the views set out in their paper. We have sought here
to focus on responses to the points within the consultation paper that are of particular relevance to the FX market.