US FX swap exemption not a loophole

Author: Danielle Myles | Published: 10 May 2011

US counsel have dismissed talk that the exclusion of FX swaps from clearing, trading and collateral requirements will be abused. But the move adds to fears of regulatory arbitrage between the US and Europe.

The US Treasury used its powers under Dodd-Frank to propose exempting these instruments from the Act’s most onerous derivative reforms. The announcement was quickly followed by claims that other instruments would be restructured to take advantage of the exemption.

But lawyers say this is not...