European corporates can now signal their support for the FX Global Code by joining a register, which was launched yesterday by the European Association of Corporate Treasurers (EACT). In its statement, the EACT says it has supported the FX Global Code since its drafting phases. The first phase of the global code of conduct for global FX markets was published by the Bank for International Settlements (BIS) in May 2016. It aimed to raise standards and promote fairness and efficiency in currency markets.
6 principles for the FX Global Code
This article explains FX Global Code's six principles of good practice and how it affects corporate treasurers: What is the FX Global Code and how will it affect treasury?
According to the EACT, the code applies to different market participants to differing degrees, depending on the level of operations and engagement with global currency markets. The register is intended for corporate treasury departments that are participating in FX markets as end-users. The EACT's Chair, Jean-Marc Servat, explains: “The FX Global Code is a very positive initiative aiming at ensuring fair and transparent FX markets that benefit all participants, including corporate end users. We believe that a widespread adherence to the code and its principles can truly help improve the functioning of FX markets and prevent some of the dysfunctions of the past.” Mr Servat encourages corporate treasury departments to familiarise themselves with the code’s principles and to adhere to it, as well as to prompt their banking partners to adhere to the code. Furthermore, the EACT says it welcomes corporations to post their Statements of Commitment on its register to demonstrate their adherence and support to good practices in the FX market.
The EACT has posted its FX Global Code Register on its website. So far, Total, Siemens, Shell Treasury Centre, RTL Group and Airbus have publicly stated their committed to the FX Global Code register.
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Here are four ways that the voluntary FX global code of conduct could have an impact on how banks interact with corporate treasury departments
FX market authorities welcome Global Code of conduct
A voluntary code of conduct for the global foreign exchange markets, the FX Global Code, was released yesterday, with the aim of raising standards and promoting fairness and efficiency
What is the FX Global Code and how will it affect treasury?
The complete FX global code and its adherence mechanisms are due to be released this month – so how will the new code affect corporate treasurers?