Trade reporting is driving FX options out of the US, say dealers
Some buy-side firms are choosing to trade with European rather than US counterparties to evade mandatory trade reporting requirements that have already come into force under the Dodd-Frank Act, according to senior foreign exchange officials at three banks.
While all non-spot FX transactions must now be reported in the US, a preference for European counterparties has become particularly apparent for FX options because the market is less liquid and contracts tend to be longer-dated than for other
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