In anticipation of its appointment as the competent authority in Ireland in respect of the Regulation on OTC derivative transactions, central counterparties (CCPs) and trade repositories (Regulation 648/2012) also known as the European Market Infrastructure Regulation (EMIR), the Central Bank updated its EMIR FAQ page to include new guidance regarding the reporting of FX forwards.

The updated guidance provides, as a temporary measure pending ESMA clarification, that the Central Bank deems it reasonable not to report FX transactions with settlement before or on the relevant spot date and that any FX transactions with settlement between the spot date and seven days (inclusive) need only be reported if, in the jurisdiction where a counterparty to the trade is located, local laws, rules or guidance deem the transaction reportable and where this is the case, the Irish counterparty should rely on documentation from that counterparty to inform it that there is a requirement in their jurisdiction. All FX transactions with settlement beyond seven days should be reported. 

It is expected that the statutory instrument appointing the Central Bank as competent authority will issue shortly, and the Central Bank has indicated that further guidance regarding the treatment of FX forwards may be forthcoming once it is so appointed.

ESMA published a letter (dated 23 July 2014) from Jonathan Faull, European Commission Director General for Internal Market and Services, to Steven Maijoor, ESMA Chair, on the need for clarity regarding the definition of a financial instrument relating to FX contracts and setting out the broad consensus on a definition of FX spot contracts.