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Non-Deliverable Forwards

Non-Deliverable Forwards (NDFs) are used by a variety of end-users and are an important tool to facilitate trade and investment between the U.S. and developing market countries.

ABA's Position

ABA believes that public policy considerations and legislative history strongly suggest that NDFs were unintentionally excluded from the definition of “forward exchange forward” in the Commodity Exchange Act (CEA), and therefore NDFs were not subject to the U.S. Treasury’s determination to exempt foreign exchange swaps and forwards from certain regulatory requirements. ABA believes this legislative oversight should be corrected in a way that clearly subjects NDFs to the same level of regulation as other foreign exchange forwards. To accomplish this, ABA recommends that, through the legislative process, the CEA’s definition of “foreign exchange forward” be amended to include NDFs or the CFTC issue exemptive relief for NDFs.

Recent News

  • On December 5, 2014, the foreign exchange subcommittee (FEM) of the Global Markets Advisory Committee (GMAC) submitted a condensed 10-page report to the CFTC, proposing a 12-month schedule for clearing NDFs.
  • On April 2, 2015, the European Securities and Markets Authority (ESMA) published a feedback statement in which it declared that it is not proposing a clearing obligation on NDFs because more time is needed to “appropriately address the main concerns raised during the consultation.”

Taken together, these two news items suggest that members should not anticipate a clearing requirement for NDFs in the immediate future.  ABA will continue to monitor developments in this space and update members accordingly. 


 Letters to Congress & Regulators

Questions?  Please contact Cecelia Calaby for more information.

 ABA Staff Contact


 Related Resources


 Center for Bank Derivatives Policy

ABA's Center for Bank Derivatives Policy is a resource for banks focused on the derivatives markets.

 Derivatives Policy Issues