UK and EC clash over forex reporting exemption

The FCA and EC diverge over whether certain forex derivatives are subject to mandatory reporting

With less than a month to go before mandatory reporting of swaps trades in Europe begins, the European Commission (EC) and the UK Financial Conduct Authority (FCA) are at odds over a loophole that allows swaps users to leave certain foreign exchange derivatives unreported.

The loophole exists because of the way the FCA has interpreted the definition of a derivative under the Markets in Financial Instruments Directive (Mifid).

In its national implementation of the directive, which came into force