Foreign exchange markets have been in operational limbo for the past five months. The Dodd-Frank Act, which came into force in the US last July, introduced mandatory clearing for all over-the-counter derivatives and swaps. While the legislation had initially exempted the $2.5 trillion FX swaps and forwards market from the new rules, the final version contained no exemption. The final decision, left to the US Treasury secretary, is expected in the first quarter.
In the interim, FX participants have had no choice but to start preparing for that eventuality.
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