New Eu Regulation of derivatives/FX

[Shaun12uk]

What I am concerned about is this new regulation that is supposedly being pushed through and was agreed this week. It basically forces derivatives to be cleared through central clearing houses which will enforce higher margins and capital rules.

Will this affect all Fx transactions - in the US I don't think the Dodd frank rules will apply to FX but the EU are talking about all derivatives with limited exceptions.

Can anyone shed any light on this?
Will this affect all FX brokers?

 

[Jack_Larkin]

How much higher margin? Any source with numbers or the working intentions toward FX within the EU?

I can't see them hurting retail FX too much by doing this... unless the changes are extreme.

 

[tomorton]

It's hard to call this, because I think the real aim of European-centric politicians and the EU machine, is political union. This explains why the Euro was created with inadequate supporting infrastructure and why the same political machine were so tolerant of Germany and France's abuse of the Euro finance rules a few years ago, and why they later allowed Greece (and possibly others) to join the Euro-zone on falsified numbers.

The lack of determination and urgency to restore strength to the Euro project is because the Euro is not the project. Surely, it was created to fail, as a result of the failure of the unification campaign, and the Euro's failure would drag the member states to unite politically in effect if not in name by subverting their fiscal policies and economic strategies to save it.

All of which means that the machine is not targeting increased wealth, in the pure capitalist anglo-saxon way, it has political objectives. If the United States of Europe politicians are prepared to run the economies of Europe into an inevitable crisis for 'larger', political ends, they will certainly be happy to wave goodbye to an industry that they regard as uncontrolled and UK-centred in exchange for a one -off tax windfall and populist bank-bashing poll results.

 

[Jack_Larkin]

That's a little too off the 'deep end' in conspiracy for me.

 

[tomorton]

The unique factor in the United States of Europe Conspiracy theory is that there's nothing covert about it -

“One thing is certain,” Chancellor Helmut Kohl said in 1991 at the completion of the Maastricht accords on political, economic and monetary union: “When this Europe in 1997 or 1999 has a common currency from Copenhagen to Madrid and from The Hague to Rome, when more than 350 million people live in a common space without border controls, then no bureaucrat in Europe is going to be able to stop the process of political unification.” He continued: “The member states of the European Community are now bound in such a way that it is impossible for them to split apart and fall back into the concept of the nation-state, with all of its consequences. That means that we have achieved a key goal of German policy toward Europe.”

 

[Shaun12uk]

My initial cynicism takes me in the direction that all futures and FX would have to be regulated in the EU in order to quantify the number transactions which in turn would enable transactions to be TAXED!!!
With most spot fx transactions and the like they have no means of ascertaining who and how many contracts without any central EU regulation. Maybe they will just apply it to banks or large transactions leaving retail fx unaffected?

 

[The Pear]

so in practical terms what will it cost me if I trade 1 (100,000) lot of EURUSD? if it is at 1.3200 am I going to be forced to stup up $0.13? Or will I have to pay in euros?

 

[Shaun12uk]

so in practical terms what will it cost me if I trade 1 (100,000) lot of EURUSD? if it is at 1.3200 am I going to be forced to stup up $0.13? Or will I have to pay in euros?

There is nothing concrete yet and they will have to draft the proposals on regulation which will give some more details. The issue that concerns me is that if retail fx which is non spreadbet has to go thru a market clearing house is that margins will go thru the roof!

We will have to wait and see!

 

[Pat494]

More red tape that makes European business even more uncompetitive.
The sooner people realize the hole that is being dug for them the better and reject a system that is corrupt and basically useless.
Scrap the two Parliament buildings and all those overpaid MePs.