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Strengthening Principles & Code of Conduct Standards in FX Markets
The Foreign Exchange Working Group (FXWG) has now been established to create a Global Code of Conduct for the FX Market.
“A single, global common code of conduct is a necessary goal for the FX industry. The Code will be principles-based rather than rules-based and will provide guidance on what is, as well as what is not, appropriate behaviour for practitioners in the FX market.”
BIS Press Release, ‘The Foreign Exchange Working Group’,
24 July 2015
In a press release issued on 24th July 2015, the Bank of International Settlements (BIS), announced the creation of the Foreign Exchange Working Group (FXWG).
The FXWG is a committee created from both Central Banks and FX Market Participants from a number of global jurisdictions with the sole purpose of creating a globally recognised code of standards and best practice within the FX wholesale Market.
>> See also Members of the FXWG
About the FXWG:
The press release advises that membership of the Foreign Exchange Working Group (FXWG) covers major financial centres in both advanced and emerging market economies. In addition the FXWG will look to reach out to jurisdictions beyond those represented on the Markets Committee to that a wider range of opinion can be input.
It is anticipated that the FX Global Code will cover the wholesale foreign exchange market and be wide-ranging across both infrastructures and market participants and will establish a clear set of examples and guidelines for behaviour that are consistent with the laid out best standards and principles to be adopted.
Headed by Guy Debelle from the Reserve Bank of Australia and Chairman of the Markets Committee said:
“A single, global common code of conduct is a necessary goal for the FX industry. The Code will be principles-based ‒ rather than rules-based ‒ and will provide guidance on what is, as well as what is not, appropriate behaviour for practitioners in the FX market.”
The FXWG's principle objectives are to create the establishment of a global single code of conduct for the standards and principles within the wholesale FX market as well as to promote greater adherence to these.
In summary, the FXWG’s aims and objectives will be to:
Intended to cover all aspects of the Global Wholesale Foreign Exchange Market, the Global Code will look to have “appropriate consideration to local circumstances” BIS informs.
The work of the FXWG will be split into two phases, with the first phase being to draft the new Global Code and the second to develop proposals to promote and incentivise adherence to the new Global Code.
The work that will be undertaken by the FXWG will also aim to build upon that of the various regional foreign exchange committees (FXCs).
The advised the target date for finalisation of the Code and the FXWG’s proposals to ensure greater adherence within the FX Market is anticipated to be in May 2017.
|Principles of the FX Global Code|
|Who will the FX Global Code apply to?|
|Risk Management & Compliance|
|Confirmation & Settlement|
|Members of the FXWG|
|FCA FX Remediation Programme: Next Steps|
|The Global Code: First Phase|
|Foreign Exchange Working Group Established|