European Commission backs FX forwards margin exemption

Need for change is “undisputed”, official says, but short-term relief expected to come via forbearance

Buy-side exemption: “The need for international convergence in this area is undisputed," says an EC official

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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