Global central banks, regulators, and Forex dealers around the world have welcomed the official launch today of the FX Global Code of Conduct.
The Code – a single set of global principles of good practice for the wholesale FX market – was begun in 2015 by the Foreign Exchange Working Group (FXWG), a partnership of central banks and Market Participants from 16 international jurisdictions, set up by the Bank of International Settlements (BIS) in the wake of scandals that rocked the Forex market between 2013 and 2014.
The Global Code will be promoted, maintained and regularly updated by the Global Foreign Exchange Committee, a forum set up 25 May 2017 to encourage greater openness and transparency in the forex market so that – in the words of the committee’s website – “a diverse set of participants, supported by resilient infrastructure, are able to confidently and effectively transact at competitive prices that reflect available information and in a manner that conforms to acceptable standards of behaviour.”
Rather than rules to be obeyed, the guidelines contain 55 principles to be followed. The principles cover 6 main areas: ethics, governance, information sharing, execution, risk management and compliance.
Speaking at the press conference to launch the Global Code, Reserve Bank of Australia Deputy Governor and Chairman at the FXWG Guy Debelle said: “All of us recognize the need to restore the public’s faith in the foreign exchange market. We share the view that the Global Code plays an important role in assisting that process and in helping improve market functioning.”
Debelle’s comments were followed by those of David Puth, CEO of CLS and Chairman the Market Participants Group, who said: “It is now up to each of us to follow through with our commitment to adopt the principles that we have established. I am extremely confident that those who wish to compete in this market will be more successful if they follow the principles that we have established together.”
Some of the many statements of support for FX Global Code of Conduct issued by banks, regulators and Forex dealers
William Dudley, President of the Federal Reserve Branch in New York
The collaborative work among private and public sector participants to develop a single, global code has resulted in an important set of common standards for foreign exchange markets. The FX Global Code can help restore integrity and transparency to these critical markets. I welcome and encourage efforts by the industry to implement and adhere to these principle.
The Bank of England
The European System of Central Banks has welcomed the publication of the Code and related adherence mechanisms material. A separate statement of support has been issued by governors of the Bank for International Settlements Global Economy Meeting.
The UK’s Financial Conduct Authority (FCA)
The FCA welcomes today’s publication of the FX Global Code (link is external). As we set out in our Mission, standards can be a useful way for the industry to police itself in support of our regulatory work and can help firms to communicate expectations of individuals when linked to the Senior Managers and Certification Regime.
Dan Marcus, CEO of ParFX, brokers in OTC financial and commodity-related products
ParFX welcomes the launch of the FX Global Code for the wholesale foreign exchange (FX) market. This initiative sets out guidelines and principles that will strengthen the integrity and effectiveness of the FX market
Chip Lowry, Chair of the Foreign Exchange Professionals Association (FXPA)
The FXPA endorses the Global Code and its stated aim to promote a robust, fair, liquid, open and transparent market, which is very much in line with FXPA’s own principles. We recommend that our members demonstrate their commitment to adopting the good practices set forth in the Code,” said Chip Lowry, Chair of FXPA, adding that the institution “commends the global coordination and work of the BIS’s Foreign Exchange Working Group in strengthening global standards for those operating in the FX market. We fully support the adoption of its principles.
Seth Johnson, Chief Executive Officer , NEX Markets
The creation of this Code, and the strong support for it across the market demonstrates the way in which the FX market participants are taking the lead in shaping and establishing an appropriate framework for the industry. NEX Markets will adopt the principles and promote their use across our customer base.
The Wholesale Markets Brokers’ Association (WMBA)
The Wholesale Markets Brokers’ Association welcomes and strongly supports the launch of the FX Global Code for the wholesale foreign exchange (FX) market. Collectively, WMBA member firms operate, arrange and execute the vast majority of the FX wholesale turnover around the world each and every day.
James Kemp, Managing Director of Global FX at Global Financial Markets Association (GMFA)
In response to the first phase of the Code, published in May 2016, our members have already made significant enhancements to their conduct and control standards. For example, placing greater emphasis on the first Line of Defence, strengthening the control environment and establishing more robust oversight structures. More emphasis is being placed on conduct training, as well as adherence to procedures and policies. However, there is no room for complacency. With the complete Code now published, our members will continue to strengthen their technology, policies and procedures to ensure they align with the principles.