SIFMA AMG Submits Comments on EC Consultation Document Regarding FX Financial Instruments

The Asset Management Group of SIFMA ("SIFMA AMG") submitted comments on the European Commission's ("EC") consultation document regarding foreign exchange ("FX") financial instruments, which considers where the boundary lies between what is and is not an FX financial instrument. SIFMA AMG focused its letter on questions that address the scope of the FX spot test in light of its members' use of FX markets, as well as SIFMA AMG's interaction with other global regulators on the topic. The letter argues that FX spots are unique instruments that are distinct from derivatives. It urges the EC to adopt a "bright line approach" with a single cut-off settlement of T+7 days for FX spots. Notably, SIFMA AMG criticizes the CFTC's definition of "security conversion transaction" in connection with its standard for FX spots, arguing that it has led to uncertainty and has been difficult to work in practice.

See: SIFMA AMG Comment Letter. Related news: MFA Files Letter to EC on FX Spot Transactions (with Zwirb Comment) (May 15, 2014).