The Bank for International Settlements (BIS) has released its ‘Global FX Code of Conduct’, set to establish a “common set of guidelines” for market participants.
The rules are organised into six principles; ethics, governance, information sharing, execution, risk management, and confirmation and settlement processes.
Market participants are “expected to behave in an ethical and professional manner to promote the fairness and integrity of the FX market.”
FX Scandals led to mass fines across investment banks, with Bank of America, UBS, RBS, JP Morgan, Citigroup and Barclays paying a combined $5.6 billion to settle allegations of rigging foreign exchange markets.
Commenting on BIS’s Global Code, James Kemp, Global Financial Markets Association’s managing director of its FX division, said the initiative is set to restore confidence in global markets, which is “fundamental to the functionality of [the] industry.”
Kemp added: “We believe the introduction of a single code will create a common reference point to encourage good practice and re-build public confidence in the FX industry.”
Thomson Reuters’ global head of FRC trading Phil Weisberg, said the firm operates at the heart of the FX market.
He added: “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.”
BIS explained in its code: “The Global Code will evolve, as required, over time as the FX Market evolves.”