The Bank for International Settlements (BIS) has published the first phase of the global code of conduct for global FX markets, aimed at raising standards and promoting fairness and efficiency in currency markets.
The Global Code of Conduct for the Foreign Exchange Market was released yesterday by the Foreign Exchange Working Group (FXWG).
Robust, fair, liquid, open and transparent
The FXWG was set up in July 2015 and operates under the auspices of the Markets Committee and is supported by the private sector Market Participants Group (MPG). FXWG chairman Guy Debelle, assistant governor of the Reserve Bank of Australia, said: "In a globalised world, the foreign exchange market is one of the most vital parts of the financial plumbing. One of the guiding principles underpinning our work is that the code should promote a robust, fair, liquid, open and transparent market.”
The complete code, which market participants say will have far-reaching implications across the market, will be released in May 2017.
Code welcomed by key players
The update to the code has been welcomed by the European Banking Authority as well as by leading foreign currency liquidity providers.
Thomson Reuters, owner of the FXall multi-dealer platform, which maintains its market lead with 30 per cent of the multi-dealer platform FX market, according to the 2016 Euromoney FX survey, has publicly pledged its full support for the global code of conduct for FX markets, saying that the code will raise standards of conduct in the FX market and ensure that participants work collectively to uphold fair and efficient markets.
White papers to explain participants' responsibilities
Also a member of the MPG, Thomson Reuters has played an active role in the development of the code. Phil Weisberg, global head of FRC Trading at Thomson Reuters, said: “Thomson Reuters operates at the heart of the FX market and we take very seriously our role to set standards by establishing clear rules and increasing transparency across our transaction venues. We will help our customers understand their responsibilities under the global code and encourage their active engagement in the interests of the wider FX market.”
Thomson Reuters will also publish two white papers to explain the responsibilities of market participants on both the buy and sell-side.
Banks losing FX market share to non-bank liquidity providers – survey
The success of non-bank FX liquidity providers such as XTX Markets and the loss of combined market share of the top five banks are two trends highlighted in this year's Euromoney FX survey.
Global FX market faces credit gap of $1.3 trillion
The global FX market has a 'credit gap' of about $1.3 trillion according to research, which could leave many stakeholders in dire straits but no one is addressing the problem.
Why treasury urgently needs to invest in FX risk management capabilities
Deloitte calls for investment in treasury's FX data processing and analytics tools, as FX exposures remain one of the weak spots of corporate treasury.