Forex markets hope for CCP exemption

The US Treasury completed an industry consultation in November on whether to exempt foreign exchange swaps and forwards from the mandatory clearing requirement under the Dodd-Frank Act. With other legislators set to follow the US lead, have forex dealers made a strong enough case to focus more on settlement risk? Joel Clark reports

Participants in the global foreign exchange market have been on tenterhooks ever since politicians first began drafting rules to require the clearing of over-the-counter derivatives through central counterparties (CCPs). While that change might make sense to mitigate counterparty risk in many OTC instruments, bankers have insisted settlement risk is the greater issue for forex, and have pushed for swaps and forwards to be exempted from central clearing. After months of lobbying, the end may just