NEW YORK -- New York Gov. Mario Cuomo has signed a bill closing a centuries-old loophole that could have been invoked to invalidate many derivatives and foreign exchange transactions.
The loophole, originating from the English Statute of Frauds of 1677, could have been used to invalidate any transaction that was not completed within one year and that was not confirmed in writing.
The new bill considers recordings of telephone conversations or confirmations by facsimile, telex, or computer as valid. Confirmations other than by telephone are valid if the confirmation takes place within five working days of the trade.