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The European Commission instructs ESMA on definition of FX contracts 

August 1, 2014
Andrew Saks McLeod, LeapRate

Ambiguity as to how to define spot FX contracts to be addressed by the European Commission in advent of MiFID II

As the European Commission continues to implement its regulatory reforms for OTC derivatives, Steven Maijoor, Chairman of the European Securities and Markets Authority has received a letter from Jonathan Faull, the Director General for the Internal Market and Services at the European Commission regarding the clarification and definition of a financial instrument relating to foreign currency (FX contract).

The instructive letter from the European Commission’s purpose is to draw to Mr. Maijoor’s attention that Omnibus I (Directive 2010/78/EU) introduced a sunset clause in Article 64a of MIFID 1 which provides that “the powers conferred on the Commission in Article 64 to adopt implementing measures that remain after the entry into force of the Lisbon Treaty on December 1, 2009 shall cease to apply on December 1, 2012.”

Read more: LeapRate

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