The Treasury Department may exempt some foreign-exchange instruments from new rules governing derivatives, The Wall Street Journal reports. Treasury secretary, Timothy Geithner, said that FX derivatives do not pose the same risks to the financial system as they involve fewer payment fluctuations and less counterparty risk than more complex products.

The department will soon make the decision in order to enable the Commodity Futures Trading Commission to finalize its rules by July 2011. As per the business and banking groups, FX products allow for currencies to be exchanged at a fixed price at an agreed-upon time in the future and the maturity is typically shorter in duration than other derivatives.

Click here for the story from The Wall Street Journal.

Click here for additional coverage from Market Watch.