The last few weeks
have highlighted, hopefully, my concerns at what I consider to be growing
regulatory dysfunction as authorities in one jurisdiction apparently take
action without conferring with their peers or bring charges without, to my mind
at least, thinking it through adequately or, perhaps, conferring with trusted
I don’t think this is
a very serious issue yet, but if it carries on the cloud of uncertainty under
which the foreign exchange industry currently exists will grow larger and could
potentially unleash a storm that brings the industry to a grinding halt – and
lest we forget the primary function
of FX markets is to oil the wheels of the global economy.
More than ever the FX
industry needs engagement with the world’s authorities, so it was with no
little trepidation that I heard of the resignation of ACI – The Financial
Markets Association president Marshall Bailey.
In his four years as
ACI’s first paid president Bailey has succeeded in establishing the association
within the reform process. It has a seat on the FX working group currently
developing the second stage of the Code of Conduct, and ACI has rolled out
ELAC, its learning and certification tool that will help firms explicitly demonstrate
their work on ensuring their staff are compliant.
In the process ACI has
also managed to firmly rid itself of the perception it was a social network
first and foremost. After all, what says “professional” more than the
employment of someone to lead the association? Some may consider the earlier
description an unfair view, however it was, sadly, what too many people
continued to believe.
So while the work is
nowhere near finished, ACI has made considerable progress – if nothing else it
has been able to highlight the work undertaken for decades by its Committee for
Professionalism in developing what was the first global code of conduct.
This means the transition
process at the association needs to be handled quickly and expertly. As Profit & Loss reported when breaking
the news of Bailey stepping down, ACI has announced a temporary replacement in
the form of Brigid Taylor from ACI South Africa, which is important because the
one thing needed when unexpected transition takes place is clarity.
I understand that
there is some discontent over how the initial transition was handled, however I
do not see what else ACI’s management board – responsible for the operation of
the association – could have done. Put simply, the foreign exchange world has
to know that ACI is not going to be rudderless while it selects a new
association goes through the same detailed process it did when appointing
Bailey it can be assumed that a permanent incumbent could be approved and
unveiled at ACI’s council meeting in Dublin in May 2017 – around the time the Global
Code of Conduct will be finalised and published.
ACI has, for the past two decades, fought a
continuous battle to remain relevant – and that is no easy task considering it
is a members’ organisation in a world increasingly dominated by large
institutions and driven by globalisation. It is now facing its latest
challenge, the somewhat unexpected departure of its first paid president.
There are some within ACI who would prefer
the association to return to its roots wherein the presidency is a non-paid
role as it has been for the all but four of its 60 years. That is fine, as long
as there is someone who is employed
to be the face of the association who not only represents the members’ views
but also interacts with the appropriate regulators around the world on an
Not continuing the work of the past four
years should not be an option for the decision makers at ACI (and I have no
reason to believe it is being considered I should stress) because as the events
of the past three years – and especially the last few months – have shown, the
authorities do not have a panacea for all that ails the industry and they need
That help comes through engagement, by a
professional, representing professionals. So only by ensuring that someone can
dedicate their full attention to
helping complete the reform process can ACI play a role – people are simply too
busy in their jobs to be able to dedicate the time necessary to adequately
fulfil this role on a part time basis.
I consider it an unfortunate time for ACI
to have to seek a new president, but search it has to. In the meantime,
however, it must ensure the outside world sees continuity and someone dedicated
to representing ACI members in the last stages of a critical reform process.