The Association for Financial Markets in Europe has warned about the regulatory gap between U.S., Europe foreign exchange (FX) rules, The Wall Street Journal reports. The European authorities will examine how FX is treated under new derivatives regulations being drafted in the U.S. to avoid arbitrage issues emerging between the two regions. The risks involved will increase if one area imposes stricter rules than another, said James Kemp, managing director of the global FX division at the lobby group. If there are different markets structures developing in the different regions it will raise the costs for the end users who are connecting to those and for the banks, he added.

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