The Central Bank has issued the following view in relation to FX transactions:

It is our understanding that all FX transactions with settlement beyond the Spot date are to be considered Forward contracts and therefore fall within the definition of a derivative as provided for under EMIR and will be subject to the reporting obligation.

On the basis that for the vast majority of currency pairs the market convention for settling Spot transactions is T+2, it is reasonable to treat any trade with settlement T+3 or greater as a Forward transaction (except in those rare cases where the market convention for the specific currency pair is unequivocally different from T+2).

The Central Bank notes that the "current situation in Ireland and the UK differs". In the UK the FCA has indicated that FX forward contracts fall outside the scope of MiFID, and by association the scope of EMIR, where such instruments satisfy its "commercial purpose" test.

These diverging approaches are due to the fact that a derivative under EMIR is defined by reference to MiFID. Different transposition of MiFID by the various member states has therefore led to inconsistencies in the application of EMIR. In light of the confusion the European Securities and Markets Authority (ESMA) issued a letter to the EU Commission on 14 February 2014 asking them to clarify the definition of a derivative or derivative contracts under EMIR.

Pending clarification from the EU Commission, the Central Bank's position remains as outlined above, with the result that "persons located in Ireland who are obliged to make reports under EMIR are obliged to make reports in relation to FX Forwards".