FX Global Code Formally Launched

The Bank for International Settlements’ (BIS) FX Working
Group formally launched the full version of the FX Global Code of Conduct today
in London, following the release of stage one in New York last year.

The Code contains 55 principles covering areas including
ethics, transparency, governance and information-sharing. It also tackles
complex topics such as electronic trading, algorithmic trading and prime

“All of us recognise 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 also in helping improve market
functioning,” says Reserve Bank of Australia deputy governor Guy Debelle, who
chaired the FXWG.

Alongside the Code, a
blueprint for achieving widespread adherence to the Code
is laid out in a
separate report, which outlines mechanisms to encourage market participants to
follow the guidelines and ensure that the principles remain up to date.

“It is now up to each of us to follow through with our
commitment to adopt the principles that we have established,” says CLS CEO
David Puth, who chaired the Market Participants Group. “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.”

The launch of the full Code has been welcomed by central
bank governors, with Agustín Carstens, governor of the Bank of Mexico and
chair of the BIS Global Economy Meeting, saying, “The FX Global Code sets good
practices for market participants to follow and will support a robust, fair and
transparent market, underpinned by high ethical standards.”

In a statement, the governors say central banks are strongly
committed to supporting and promoting adherence to the Code. They confirm that
they intend to adhere to the principles of the Code, and will expect the same
of their regular FX counterparties, except where this would inhibit the discharge
of their policy functions. Additionally, members of central bank sponsored
foreign exchange committees will be expected to adhere to the Code.

“Governors encourage market participants to evolve their
practices to be consistent with the principles of the Code and to demonstrate
their commitment by using the Statement of Commitment that was also published
today,” the statement says. “They also encourage the private sector, including
associations and infrastructure providers, to raise awareness of the Code and
to develop and establish mechanisms to support its adoption.”


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Twitter @Profit_and_Loss    

Colin Lambert

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