As we have discussed, the FX Market features a very diverse range of Market Participants that may engage with various FX products in differing ways. More information on this can be found in Who Does the Global FX Code apply to?
Since Market Participants vary so much, how can the same FX Global Code be applied?
How can different Market Participants apply the Global FX Code?
The Global FX Code encompasses all Market Participants, thus for different Market Participants, applying the principles of the Global FX Code to their activities should reflect the size and complexity of their activities and the nature of their engagement in the FX Market, as well as any applicable law within their jurisdiction.
Therefore, it is recommended that each FX Market Participant undertake an appropriate internal assessment to determine what steps should be taken, and in what manner to align with the principles of the Global FX Code.
For some Market Participants this might mean including a review of their practices in light of the Global FX Code and establishing and maintaining policies, procedures and controls that are reasonably designed to support their commitment to the Code’s principles.
Additionally Market Participants might assess the appropriate level of senior management oversight and establish dedicated staff training or insert new training into existing programmes.
One way that FX Market Participants can show their support of the objectives of the Global FX Code in enhancing efficiency, functioning and transparency within the FX Market is by utilising the voluntary Statement of Commitment that has been published within the Global FX Code.
What the statement conveys can be seen below, in an example Statement of Commitment for the fictional company XYZ Ltd.
“STATEMENT OF COMMITMENT TO THE FX GLOBAL CODE
We have reviewed the content of the FX Global Code (“Code”) and acknowledge that the Code represents a set of principles generally recognised as good practice in the wholesale foreign exchange market (“FX Market”). We confirm we act as a Market Participant as defined by the Code, and are committed to conducting our FX Market activities (“Activities”) in a manner consistent with the principles of the Code. To this end, we have taken appropriate steps, based on the size and complexity of our Activities, and the nature of our engagement in the FX Market, to align our Activities with the principles of the Code.