Long-awaited 'FX Global Code' released

Long-awaited 'FX Global Code' released

In the latest of a growing list of efforts by financial services industry groups to encourage best behaviour on the part of participants, a new FX global code of conduct has been published, containing some 55 principles covering ethical, governance and information sharing procedures.

The new, 78-page-long FX Global Code, which may be viewed and downloaded here, was developed under the supervision of the Bank of International Settlements by the Foreign Exchange Working Group, or FXWG, which consists of 16 major central banks, and in consultation with a private sector market participants’ group, chaired by David Puth of CLS Bank International.

Its maintenance will be overseen by the so-called Global Foreign Exchange Committee (GFXC), which was formally created in London on Wednesday, according to a statement accessed via the Bank for International Settlements’ website.

“Broadly, the GFXC will seek to promote collaboration and communication among local foreign exchange committees and other jurisdictions with significant FX markets,” the statement said. “It will also provide a forum for the exchange of views on market trends and developments.”

Some media organisations questioned to what extent the new code would be able to work in practice, but it was welcomed by such organisations as the UK’s Financial Conduct Authority, Monetary Authority of Singapore, Hong Kong Monetary Authority and the Life Insurance Association of Singapore.

Said the FCA: “The FCA welcomes today’s publication of the FX Global Code. 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.

“We expect firms, senior managers, certified individuals and other relevant persons to take responsibility for and be able to demonstrate their own adherence with standards of market conduct.”

Added the LIAS: “LIA Singapore encourages all member companies to evolve their foreign exchange practices to be consistent with the principles outlined in the set of principles of good practice for global FX markets.”