Rumors are abundant that Treasury will soon adopt rules exempting foreign exchange forwards from treatment as "swaps" and hence from Dodd-Frank provisions which would otherwise require them to become exchange traded instead of via private over-the-counter transactions as at present.
There is a swirl of controversy over this. See for example: Quelle Surprise! Geithner Gutting Dodd-Frank which is a good introduction to the issues involved in the polemic.
One important thing to note is that Dodd-Frank was not meant to regulate the cash forex market. So that vast market should continue to function as in the past.
Other than that, since the comment period on the rules is long over, my own attitude is to await the issuance of the final Treasury rules. As always, the devil will be (or won't be) in the details.
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Robert Kiggins, Esq. of McCarthy Fingar LLP, is author of the blog, and may be reached at (914) 385-1024 or rkiggins@mccarthyfingar.com.
Nothing is this blog is intended to be or may be relied upon as specific legal advice. Securities and related laws are complex and competent counsel should be consulted. Views expressed by the author in this article are his own and not those of any other person.
