Proposed Treasury Exemption for Foreign Exchange Swaps and Forwards: Treasury proposes to exempt foreign exchange swaps and foreign exchange forwards from the definition of “swap” under the Commodity Exchange Act, as amended by the Dodd-Frank ActSullivan & Cromwell LLP - May 11, 2011
On April 29, 2011, the Department of the Treasury issued a Notice of Proposed Determination providing that foreign exchange swaps and forwards should not be regulated as swaps under the Commodity Exchange Act. Foreign exchange swaps and forwards would remain subject to the trade reporting requirements and business conduct standards set forth in the Dodd-Frank Act, as mandated by the statute, and may not be used to evade other rules promulgated by the Commodity Futures Trading Commission. The proposed determination does not extend to foreign exchange options, currency swaps and non-deliverable forwards, which will remain fully subject to the Dodd-Frank Act. Comments on the proposal are due on June 6, 2011.