FX Spot Mifid II
The only ESMA registered and FCA authorised administrator of live spot FX benchmarks. MiFID/MiFIR Legal Docs. Regulatory technical and implementing standards - Annex I ESMA writes to European Commission on MiFID II systematic internalisers operating broker crossing networks Final draft regulatory technical standards (Page 60, Point 17 At present, spot foreign exchange (FX) contracts and, in certain EU Member States, FX forwards, fall outside the scope of the existing MiFID I regime. MiFID II will implement a harmonised EU- wide definition And now, ESMA is considering bringing spot FX transactions into the scope of the Market Abuse Regulation (MAR) and MiFID II. The FX surveillance challenge . In the volatile economic climate of 2020, it will be even easier to hide FX manipulation practices under the guise of unpredictable prices and less strictly monitored home-working environments. A: A spot FX won't be subject to the VM requirements, and from 3 January next year, for the first time, there'll be an EU-wide definition of spot FX. NDFs under MiFID2 are treated as contracts for differences (CFDs) and can't be treated as spot contracts—irrespective of their settlement period. WHAT MIFID II MEANS FOR FX The first version of MiFID implemented in 2007 applied solely to equity markets. MiFID II now applies to "non-equity products" as well, such as cash and derivative products in fixed income, FX and commodities. To clarify the impact on FX by MiFID II and how to deal with it, Bloomberg's FX electronic A: The scope of MiFID II encompasses all MiFID financial instruments. The only instruments completely out of scope for MiFID II are FX spot, energy and commodity spot and Loans (both primary and where traded on a secondary market). The FCA has extended some MiFID II rules to cover structured deposits. 8. How are FX Forwards treated under MiFID II?
What MiFID II means for FX The first version of MiFID implemented in 2007 applied solely to equity markets. MiFID II now applies to “non-equity products” as well, such as cash and derivative
The EC has determined that FX Forward contracts remain outside the scope of MiFID II if they satisfy all of the following conditions: The contract for deliverable FX is physically settled At least one of the parties to the contract is a non-financial counterparty In April 2014, updated legislation known as MiFID II was approved by the European Union. It expanded the scope of the original legislation and included MiFIR, the regulation arm. This legislation is due to take effect in 2018. In FX under MiFID II the best execution obligation applies to executing orders in OTC derivatives; it therefore does not naturally extend to spot transactions. The exception applies to FX deals that are ancillary to trades in assets that are covered by MiFID II best execution rules. What FX instruments are MiFID instruments? Is FX covered under MIFID? Yes - if it is a Financial Instrument :-Financial instruments under MIFID Annex 1 Section C of MIFID:-4. Options futures swaps, FRAs and any other derivative contracts relating to securities , currencies, interest rates or yields…which may be settled physically or in cash.. 9.
Spot FX. Overview. A spot foreign exchange transaction involves the purchase of one currency against the sale of another at an agreed
MiFID II can be broken down into the following five key themes: market structure, market transparency, trading regime, investor protection and, internal controls and governance. Market structure. While MiFID I only addressed equity markets, MiFID II covers virtually all financial instruments, with the exception of only a few such as spot FX deals. 11 Mar 2020 The European Commission is looking to Australia as it considers pulling spot foreign exchange into Mifid II, the regime that exists for equities, bonds and derivatives – a radical change that industry lawyers and lobbyists have been hoping would fade from view, following intense criticism. That hasn’t happened yet. Just over one year since MiFID II came into effect, TRAction still gets asked whether Rolling Spot FX and Spot Precious Metals are reportable under MiFIR. Here we explain why we consider Rolling Spot FX and Spot Precious Metals are not reportable under MiFIR. Financial instruments that are subject to MiFIR What MiFID II means for FX The first version of MiFID implemented in 2007 applied solely to equity markets. MiFID II now applies to “non-equity products” as well, such as cash and derivative FX contracts with a settlement period of more than two days (T+2) would be automatically considered as FX derivative contracts and hence qualified as financial instruments in scope of the MiFID II requirements. Option 2 – Defining FX spot contracts as contracts with a settlement of up to T+2 with qualifications
The first version of MiFID applied solely to equity markets, MiFID II applies to “non-equity products,” such as cash and derivative products in fixed income, FX and commodities.
Just over one year since MiFID II came into effect, TRAction still gets asked whether Rolling Spot FX and Spot Precious Metals are reportable under MiFIR. Here we explain why we consider Rolling Spot FX and Spot Precious Metals are not reportable under MiFIR. Financial instruments that are subject to MiFIR What MiFID II means for FX The first version of MiFID implemented in 2007 applied solely to equity markets. MiFID II now applies to “non-equity products” as well, such as cash and derivative FX contracts with a settlement period of more than two days (T+2) would be automatically considered as FX derivative contracts and hence qualified as financial instruments in scope of the MiFID II requirements. Option 2 – Defining FX spot contracts as contracts with a settlement of up to T+2 with qualifications The EC has determined that FX Forward contracts remain outside the scope of MiFID II if they satisfy all of the following conditions: The contract for deliverable FX is physically settled At least one of the parties to the contract is a non-financial counterparty In April 2014, updated legislation known as MiFID II was approved by the European Union. It expanded the scope of the original legislation and included MiFIR, the regulation arm. This legislation is due to take effect in 2018.
Vela's Ollie Cadman says new regs make data an invaluable asset for trading desks.
And now, ESMA is considering bringing spot FX transactions into the scope of the Market Abuse Regulation (MAR) and MiFID II. The FX surveillance challenge . In the volatile economic climate of 2020, it will be even easier to hide FX manipulation practices under the guise of unpredictable prices and less strictly monitored home-working environments. A: A spot FX won't be subject to the VM requirements, and from 3 January next year, for the first time, there'll be an EU-wide definition of spot FX. NDFs under MiFID2 are treated as contracts for differences (CFDs) and can't be treated as spot contracts—irrespective of their settlement period. WHAT MIFID II MEANS FOR FX The first version of MiFID implemented in 2007 applied solely to equity markets. MiFID II now applies to "non-equity products" as well, such as cash and derivative products in fixed income, FX and commodities. To clarify the impact on FX by MiFID II and how to deal with it, Bloomberg's FX electronic A: The scope of MiFID II encompasses all MiFID financial instruments. The only instruments completely out of scope for MiFID II are FX spot, energy and commodity spot and Loans (both primary and where traded on a secondary market). The FCA has extended some MiFID II rules to cover structured deposits. 8. How are FX Forwards treated under MiFID II? MiFID II entered into force on 3 January 2018 and BNP Paribas Securities Services has paid specific attention to this historical launch. As a custodian, this is the first time we are facing such a wide-ranging directive, with many impacts across commercial, operational and functional teams. The Central Bank indicated that it would revise this guidance depending on the approach taken by the European Commission in any relevant delegated regulation under MiFID II(2). Commission delegated regulation. The Commission has adopted a Delegated Regulation which provides that spot FX is generally limited to transactions which settle in T+2 An FX Spot transaction will not be a financial instrument and will be excluded from MiFID II if under its terms delivery is scheduled to be made within a specified number of trading days. The number of trading days depends upon the type of contract and the currencies