Manufacturers Applaud Treasury Determination on FX Swaps

By November 19, 2012Taxation

The NAM joined the Coalition for Derivatives End-Users today in applauding the determination by the U.S. Treasury Department late last week that foreign exchange (FX) swaps should not to be regulated as “swaps” under the Dodd-Frank Wall Street Reform Act. The NAM and the Coalition called on Treasury to make this final determination two years ago in comments stating that as FX swaps and forwards “do not materially contribute to systemic risk” that they should be granted an exemption from additional regulation. This determination is a clear acknowledgement that over-regulating in this area would be detrimental to end-users’ efforts to manage risk through FX swaps and forward.

Manufacturers have long used derivatives to hedge business risk and the granting of an exemption for these swaps by Treasury is a positive step forward. We hope that other agencies will follow suit and ensure that as they continue to implement Dodd-Frank –particularly in the areas of margin requirements, inter-affiliate trades and cross-border rules –they do not create new costs and regulatory burdens on end-users.  We appreciate Treasury’s granting of an exemption for FX swaps and forwards.

Carolyn Lee

Carolyn Lee

Senior Director of Tax Policy at National Association of Manufacturers
Carolyn Lee is Senior Director of Tax Policy at the National Association of Manufacturers (NAM), the nation's largest industrial trade association. In this role Carolyn is responsible for portions of the NAM's tax portfolio including issues individual marginal tax rates - which are a top priority for small and medium sized manufacturers - as well tax issues relating to investment income, energy efficiency and capital cost recovery.
Carolyn Lee

Leave a Reply