Regulations Driving Move to Futures in FX Trading

  • 18 Feb 2014
  • By Greenwich Associates
  • Topics: FX

FX Futures and Options to Grow in Importance in Wake of New Regulation

Change is coming to the FX marketplace, and despite numerous exemptions for FX swaps and forwards, these products, as well as non-exempt bi-lateral options and NDFs, will become more expensive to trade, a new Greenwich Associates report says.

New trade reporting requirements, Basel III capital charges and expanded documentation are among many factors expected to drive up costs and shrink the number of liquidity providers, according to The Futurization of FX Derivatives report. Added expense of trading and clearing NDFs and FX options, and uncertainty around clearing and settling the latter, has motivated many end users to seek less expensive alternatives.

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