Foreign currencies instruments

Spot and Derivative Contracts

The German Insurance Association welcomes the European Commission’s approach to prospectively differentiate more precisely between foreign currencies (FX) spot contracts and FX derivative contracts. In particular with regard to the European Market Infrastructure Regulation (EMIR) and the cross-border-activities of German insurers and reinsurers it is crucial from the view of the German insurance industry, that a clear and common understanding which FX contracts are financial instruments in the meaning of the Markets in Financial Instruments Directive (MiFID) and which are not, is found.

Against this background, we would like to raise the following points with respect to selected sections of the discussion paper:

  • FX spot transactions are very important for the settlement of commercial transactions and securities and should therefore be precisely defined and separated from other FX transactions.
  • The main uses of FX spot transactions for German insurers and re-insurers are payment and hedging. The use of FX spot transactions for investment and speculation purposes is subordinated for German insurers and reinsurers.
  • The German insurance industry prefers one single cut-off period of at least 3 valid banking days in order to delineate FX spot contracts from FX derivative contracts.

The GDV’s complete position paper is available in the download section.


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Position Paper

Comments of the German Insurance Association on the European Commission Services Non-Paper FX Instruments Consultation

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