FX swap margin treatment uncertain ahead of VM deadline

With one month to go, market participants are still unsure how to treat foreign exchange derivatives

confusion-question-shutterstock
Market participants wonder: is it a forward or is it a swap?

A touch of the surreal has descended upon the market for foreign exchange swaps in recent weeks, as participants ponder whether the instrument ever truly existed.

This existential angst stems from the incoming derivatives margin rules. In Europe, most counterparties will have to pay variation margin on FX swap positions from March 1. Many buy-side users, however, book the instrument as a forward – and these are being margined from the start of 2018.

A lack of guidance from regulators has led to

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.fxweek.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a FX Week account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: