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Articles tagged by FX Global Code

The Impact of the FX Global Code: Good, but More to Do The Global Foreign Exchange Committee (GFXC) has issued a paper on the results of a survey it conducted with the intention of measuring the baseline level of awareness and adoption of the FX Global Code by market participants. The survey was undertaken at the end of September 2017 and sent to more than 500 FX market participants globally, including firms not involved in the creation of the Code. The survey was conducted with the objective of gathering a diverse set of views from firms representing different jurisdictions, sectors, sizes and levels of activity in the FX market.
Bloomberg Commits to FX Global Code Bloomberg has signed a statement of commitment to the FX Global Code, pledging it will continue to support fair and robust FX markets worldwide. The firm says it has long supported the creation and implementation of the Code, which was developed by a public/private body of central banks and diverse industry participants from multiple jurisdictions as a set of voluntary best practices and is aimed at all market participants engaged in the wholesale FX market. "We endorse the FX Global Code and are committed to the highest levels of integrity and market practice," says Tod Van Name, Bloomberg's global head of FX electronic trading.
AFMA Launches Code SoC Site for Australia The Australian Financial Markets Association (AFMA), supported by ACI Australia, has launched a Public Register for Statements of Commitment to the FX Global Code by participants in the wholesale Australian foreign exchange market. AFMA and ACI Australia say they are currently accepting Statements of Commitment from market participants for uploading to the register. AFMA says the opening of the Register “maintains Australia’s place at the leading edge of global developments in relation to good practice in wholesale foreign exchange markets”.
Mesirow Financial Commits to FX Global Code Mesirow Financial says it has recently signed and committed to the FX Global Code of Conduct. “By embracing these global standards, Mesirow is dedicated to follow a common set of guidelines and has taken appropriate steps, based on its size, complexity of activities and the nature of its engagement in the FX Market, to align its activities with the principles of the Code,” it says in a statement. The Code of Conduct is a set of 55 principles of good practice in the foreign exchange market that have been developed to provide a common set of guidelines to contribute to the integrity and effective functioning of the wholesale foreign exchange market.
Bank of England Commits to Three Codes of Conduct The Bank of England has today issued Statements of Commitment to the FX Global Code, the UK Money Markets Code and Global Precious Metals Code. The Bank says that in issuing the statements, it is demonstrating that it is committed to adhering to the principles of these Codes when acting as a market participant in the relevant markets, and that its internal practices and processes are aligned with the principles of the Codes. “The principles of these Codes are important in promoting the integrity and effective functioning of these respective markets,” it states.
Can Peer Pressure Work? 2018 is a big year for the FX Global Code as it will celebrate its first anniversary – a date by which all participants are expected to have adhered to the code’s principles. Will the code be a success? Colin Lambert thinks he has the answer. It was, and still is, depressing having to read through legal papers and regulatroy notices on a regular basis, all of which deal with misconduct in FX markets, and nobody whould be misguided enough to think that such actions will not continue in the year ahead. They will, and probably the year after that. There is an upside in having to rake over the ashes of past misdemeanours, however, because it offers a timely and regular reminder of the importance of the FX Global Code.
And Finally... The paper has been a long time in the works, so the IA's proposed guidance around last look may not burst the bubble of those optimists who think last look is a dead issue, but it should concern providers that their clients apparently think they don't go far enough. That said, I also think this paper highlights how the buy side can be too demanding around certain issues when it could focus on having a more positive impact by doing something itself.
And Finally... So what that yet another bank has issued a boilerplate last look disclosure? Well actually this typifies the culture of "adequate disclosure" that exists in foreign exchange markets at the moment. Yes, it is a step up from previous efforts, but is it enough to rebuild trust? The FX industry must continue working towards true transparency of action, but when it cannot even deliver a coherent message on the foundation stone of its rebuilding efforts, are we right to be sceptical of its efforts?
Deutsche Bank Signs Adherence to FX Global Code Deutsche Bank has signed the statement of commitment to the FX Global Code to support an industry-wide initiative to promote integrity in the foreign exchange market. The bank’s statement has been posted on the CLS Global Code Register. The FX Global Code is a set of global principles of good practice that was developed by central banks and market participants and launched last year. By signing up to the Code, Deutsche Bank says it has committed to continuing to run its FX business according to these principles, which cover topics such as ethics, governance, information sharing, risk management and compliance. In the statement, the bank says that the business lines with the group that participate in the FX market “This is a positive step. It demonstrates our ongoing commitment to a fair, transparent, and resilient foreign exchange market and holding ourselves to the highest standards of behaviour,” says Ram Nayak, head of global fixed income and currencies at Deutsche. Deutsche Bank took an active role in the drafting of the Code with Russell Lascala, global co-head of global FX, representing the bank on the Market Participants Group. The signing of the Statement by Deutsche brings the number of institutions on the CLS Register to 19, these include Barclays, Citi, Goldman Sachs, JP Morgan and XTX Markets. Colin_lambert@profit-loss.com Twitter @lamboPnL Twitter @Profit_and_Loss
Millennium Global Takes ACI’s ELAC for Global Code Adherence Currency manager Millennium Global has committed to the FX Global Code of Conduct and will ensure adherence to its principles in partnership with ACI Financial Market Association by adopting the association’s E-Learning, Attestation and Certification (ELAC) Portal, an accredited and continuous professional development solution. Millennium is the first major UK-based buy side asset management firm to sign up to ELAC, which was launched last year and has also been adopted by ANZ Bank among others to help demonstrate adherence to the Code.
FX Global Code Passes Milestone With just over a month to go before adherence is expected of market participants, the Global FX Committee (GFXC) has announced that “well over” 100 Market Participants have now made Statements of Commitment to the FX Global Code less than one year after its launch. The majority of these statements can be found on the eight public registers around the world that have similarly launched since the release of the Code, however there is no obligation to publish a statement on a register.
Axiom Global Advisors Launches Two FX industry alumni have teamed up to launch Axiom Global Advisors, a London-based consultancy that specialises in the delivery of independent business assessments and recommendations to FX Market Participants, for their on-going adherence to the FX Global Code of Conduct, which was launched in full last year. Nick Downes and Julian Gladwin, both of whom have over 30 years in the FX industry, have established Axiom and say the firm has been established to help institutions meet the demands of the Global Code.
Pragma Signs FX Global Code SoC Pragma has announcesd it has committed to adopting the principles of the FX Global Code as a market participant. The FX Global Code was launched in partnership with policymakers and market participants, and provides a common set of guidelines to promote the integrity and effective functioning of the market. By signing a statement of commitment, Pragma affirms that the principles outlined in the Code represent a series of best practices to promote a robust, fair, liquid and transparent FX market.
FSB Publishes Conduct Risk Mitigation Toolkit The Financial Stability Board has published Strengthening Governance Frameworks to Mitigate Misconduct Risk, which provides a toolkit that firms and supervisors can use to tackle the causes and consequences of misconduct. The toolkit completes an element of the FSB’s 2015 Workplan on Measures to Reduce Misconduct Risk to promote incentives for good behaviour through standards and codes of behaviour, such as the FX Global Code, and reforms to benchmark-setting practices. It also offers a toolkit of measures to address misconduct in wholesale markets and the FSB’s guidance on the use of compensation tools to promote good conduct.
And Another Thing... A few of you have been in touch to say you couldn't make the Insights call on Tuesday but were still keen to hear my thoughts on Mark Johnson being handed down a two year jail sentence. As flattering as it is to have people want my opinion on it, I really only want to go into brief details because firstly there are things better left said on an informal, off-the-record call, and secondly, you should have been on the call!
ACI FMA to Launch New Global Code Exam ACI – the Financial Markets Association (ACI FMA) is launching a new online version of its FX Global Code Certificate. The new exam will be available from 25 May 2018. ACI says the 60-minute online exam is aimed at certifying that market participants across buy side, sell side as well as intermediary institutions, regulators, central banks, middle and back-office, operations personnel and compliance and risk officers have taken the first step towards demonstrating adherence and knowledge of the FX Global Code.
NY Fed Signs Global Code Statement of Commitment The Federal Reserve Bank of New York has released its Statement of Commitment to the FX Global Code. Using the common language of these releases, the New York Fed says it has reviewed the content of the Code “and, in issuing this Statement of Commitment, has confirmed that it acts as a Market Participant as defined by the Code. The New York Fed is committed to conducting its foreign exchange market activities, when acting as a Market Participant, in a manner consistent with the principles of the Code.”
Global FXC Unveils Global Index of Public Registers The Global Foreign Exchange Committee has launched a Global Index of Public Registers to serve as a central reference point for demonstrated commitment to the FX Global Code. Following the initial publication of the Code in May 2017, Market Participants expressed interest in developing public registers as repositories of individual Statements of Commitment to the Code. The GFXC published recommended characteristics for public registers in July 2017, and several public registers have since been established. The Global Index will aggregate information from participating public registers and make it available in a single location.
And Finally... This week the Global FX Committee meets in South Africa for its regular semi-annual meeting and it does so at a time when there are still lingering doubts in a small number of quarters over some of principles in the FX Global Code, and more broader doubts over adoption in certain market segments – not least the buy side. If ever the FX industry needed an example of why the Code is important, however, it can be found in the latest regulatory finding against a bank.
Global FXC Names Leadership Team, Reports on Progress The Global Foreign Exchange Committee has named Simon Potter executive vice president of the Federal Reserve Bank of New York, as chair for a one-year term. At its meeting this week in Johannesburg, it also nominated and elected Adrian Boehler, global co-head of FXLM and commodity derivatives at BNP Paribas, and Akira Hoshino, senior fellow and managing director, head of global markets trading at MUFG Bank, to serve together as co-vice chairs for a two-year term. Speaking to Profit & Loss after what Potter says was a very productive meeting, he is keen to stress the diversity and engagement represented by the GFXC.
In the FICC of It In this week’s In the FICC of It podcast, after last week’s confident prediction of a German World Cup win Profit & Loss’ managing editor Colin Lambert puts a hex on another team by predicting them as winners and editor Galen Stops volunteers to play fact checker on statements made by panellists at a conference. They also discuss this week’s news, including the Global Foreign Exchange Committee meeting, BNY Mellon launching an options business, the latest from the crypto world and the latest evidence (unproven) of regulatory arbitrage involving Australia and the US. On a more sombre note they also pay tribute to FX industry veteran Paul Chappell, who passed away this week, with a couple of lighter hearted stories involving him.
And Another Thing... The price action in Cable on Monday around the resignation of four government ministers in the UK was interesting and highlighted a nuance of the modern FX market structure. The pertinent question to be considered is: Do we want to have a generally stable market with fewer 200 point moves, but which has occasional flash events; or is it better to have a generally busier market, with more 200 point moves and little - or even no - flash events?
Moex Commits to FX Global Code Moscow Exchange says it has signed a statement of commitment to the FX Global Code, pledging to support robust, fair, liquid, open and transparent foreign exchange markets. The Code (is a set of global principles of good practice in the foreign exchange market, developed to provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. It was developed by a partnership between central banks and market participants from 16 jurisdictions around the globe.
And Finally... There are those in the FX world who believe the narrative of a return to bilateral, relationship-based trading was driven by a group of liquidity providers talking their book. Looking at the numbers in last week’s FX committee turnover surveys, specifically the spot e-trading statistics from the UK and US, I think it is fair to say that the cynicism is wrong, or the narrative is working, or both, because the last two years has seen a definitive shift in trading away from anonymous venues towards disclosed channels.
Global FXC Adds Pre-Hedging Example; Reports on Progress The Global Foreign Exchange Committee (GFXC) has added a negative example for Principle 11 of the FX Global Code – which deals with pre-hedging – to the document’s Annex. The update has been released alongside the minutes from the GFXC’s recent meeting in South Africa as well as a paper – The FX Global Code at One Year: A look Back and a Look Ahead – that summarises the achievements around the Global Code over the past year, but that also looks ahead to the work to be done.