European Commission backs FX forwards margin exemption
Need for change is “undisputed”, official says, but short-term relief expected to come via forbearance
The European Commission has backed plans to exempt buy-side entities from having to post variation margin on certain foreign exchange forwards. But with the regime’s January 3 start date bearing down – and a small window for regulatory change – industry sources believe European and national regulators will shortly announce forbearance for non-complying firms.
Currently, Europe is unique among major derivatives jurisdictions in requiring all financial users of physically settled FX forwards to
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