EACT response to EC consultation on foreign exchange financial instruments

09 May 2014

The EACT responded that FX transactions for commercial purposes by non-financial companies should not be considered as financial instruments under MiFID, as they promote rather than threaten financial stability.

The main elements that EACT brings forward in its consultation response are the following:

• The delineation between a spot and an FX forward transaction should take proper account of the existing market practicesand any eventual change of interpretation and scope should not put a further compliance burden on non-financial companies.
• FX transactions undertaken for commercial purposes by non-financial companies should not be understood as financial instruments under MiFID. Such transactions promote rather than threaten financial stability; obliging non-financial companies to report their transactions does not in our view help to reduce systemic risk but instead puts a significant compliance burden on non-financial actors. A clarification that these transactions, when undertaken for commercial purposes, are not classified as financial instruments under MiFID would help to reduce the regulatory burden on non-financial companies and allow them to focus on the core aim of promoting jobs and growth across Europe.
• Coherence at international level with other jurisdictions - in particular the US – is important in order to avoid competitive disadvantage and globally inconsistent obligations.
• Any eventual change of interpretation and scope should not put a further compliance burden on non-financial companies.

Media release

Full EACT response

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