One of the key questions surrounding the FX Global Code of Conduct, of which the second part is due to be released in May, is whether it would have actually prevented the scandals that have dogged the FX industry in recent years.
Brigid Taylor, global managing director of ACI, argues that it would have.
“In financial markets, people say: ‘talk is cheap, but my word is my bond’. So if I say that I’m going to do something, then I need to understand what that means, I need to understand how to apply that knowledge and then I need to do it,” says Taylor, adding that this knowledge ensures accountability.
Taylor also made the point that the Code will provide some much-needed clarity on exactly what is and isn’t acceptable behaviour for market participants.
“I think that what’s happened is that the market has reverted from ‘all things are ok’, to ‘everything is not ok’ and now we’re trying to find a middle ground to say: ‘how do we do this correctly again and find each other, whether we’re buy side, sell side, service provider or platform, to create a robust financial market that encourages those ecosystems globally?’,” she says.
Explaining the importance of the Code for the FX industry, Taylor says that many market practioners – including herself – are disillusioned by the fact that the recent scandals have tainted people’s perceptions of the industry as a whole, despite the fact that these practioners hold themselves to high ethical standards.
According to Taylor, the Code will provide a transparent benchmark for ethical behaviour within the FX market, and will also provide a way for market practitioners to offer proof that they adhere to a strong set of principles and ethical standards.
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