It sounds like quite a journey, but the global FX division of the Association for Financial Markets in Europe (AFME) will soon start the process of selecting a provider of trade repository services for the foreign exchange market on behalf of its members.
The move is a response to the Dodd-Frank requirements in the US and the regulatory proposals of the European Commission. While it is still unclear which products will be have to be centrally cleared or traded through a central counterparty (CCP), it is intended that all financial products be reported to a trade repository.
AFME says it expects to issue the request for proposal once the US Commodity Futures Trading Commission has announced interim rules on swap data repositories, expected by the end of 2010. By then it should also be clear whether FX forwards will have to cleared or CCP’d.
James Kemp, managing director of AFME’s global FX division, says: “Since AFME launched its global FX division in June this year, it has attracted 20 members, accounting for more than 85% of the FX market.
“We view the introduction of trade repositories as a positive step in providing regulators with greater access to information.