European regulators have published a consultation paper on the central clearing obligation for foreign exchange non-deliverable forwards (NDFs).
The asset class follows similar consultations on interest rate and credit default swaps, as the regulators continues to make strides in implementing new rules in line with G-20 requirements.
Within the consultation, the European Securities and Markets Authority (ESMA) proposes that ten liquid NDF classes be covered, all settled in US dollars.
The consultation comes after LCH.Clearnet was approved as a qualifying central counterparty for FX NDFs under new European regulations.
It is also expected that CME Clearing Europe, ICE Clear Europe and Nasdaq OMX Clearing will clear the products.
The consultation process will close on 6 November, and as ESMA showed this week by reducing the relief time for buy-side firms to comply with the interest rate swap rules by six months, feedback can have an effect on the final rules.
Over in the US, the Commodity Futures Trading Commission is still debating how its own NDF rules will be rolled out.