The Bank for International Settlements (BIS) Market Committee has encouraged more participants in the foreign market exchange (FX) market to take up the FX Global Code of Conduct.
The code was launched 2017 as a voluntary set of good market practices, today its turnover is more than &6.6 trillion a day. Its scope covers ethics, governance, execution, information sharing, risk management and compliance, and confirmation and settlement processes.
Markets Committee Chair Jacqueline Loh stated that a growing number of market participants have already committed to the Code of Conduct since it was first launched. She also mentioned that there is a considerable delay in the adoption of the code among important market segments, notably for large buy-side participants like asset management firms.
In an open letter to the Chair of the Global Foreign Exchange Committee (GFXC), Guy Debelle, Loh summarises the essential results of an assessment of the Code’s effectiveness. The Markets Committee recommended examining additional actions to stimulate the adoption of the Code in buy-side firms.
Loh said:
Jacqueline Loh
For the Code to be successful, it is vital that market participants from all segments recognise that adherence to the Code is an implicit part of their participation in the global FX market.
GFXC was also urged to improve the response to the Code by improving transparency and disclosing trading practices in anonymous review of the Code.
GEM Chair Mark Carney said:
Since the Code’s launch, a lot has been accomplished. It has become a benchmark for FX-related issues and has helped to improve standards of behaviour in FX markets. The GEM Governors look forward to the GFXC’s review, which will help ensure the Code remains relevant and dynamic.
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