The Bank for International Settlements (BIS) has released a global code of conduct for the wholesale foreign exchange (FX) market.
Guidelines published in the new global code of conduct aim for a fair, liquid, open, and appropriately transparent wholesale FX market.
The code of conduct, dubbed FX Global Code, is the result of a two-year work by the FXWG overseen by the Markets Committee of the Bank for International Settlements.
Comprising 55 principles, the code covers subjects like ethics, governance, transparency, and information sharing while also addressing complex topics like prime brokerage, electronic trading and algorithmic trading.
Reserve Bank of Australia Deputy Governor Guy Debelle and FXWG chair Guy Debelle said: "All of us recognise the need to restore the public's faith in the foreign exchange market. We share the view that the Global Code plays an important role in assisting that process and in helping improve market functioning.”
A new Global Foreign Exchange Committee (GFXC) will maintain and update the FX Global Code. GFXC was formed by public and private sector representatives from the foreign exchange committees of 16 international FX trading centres.
The committee will be responsible to ensure that the guidance issued stays relevant and taking into account good practices for supporting compliance.
CLS CEO and Market Participants Group chair David Puth said: "It is now up to each of us to follow through with our commitment to adopt the principles that we have established.
"I am extremely confident that those who wish to compete in this market will be more successful if they follow the principles that we have established together."
The new global code for the FX market has been endorsed by the Foreign Exchange Professionals Association (FXPA) which says that the guidelines issued are in line with its own principles.
Image: A new global code has been put in place for foreign exchange market. Photo: courtesy of Stuart Miles/Freedigitalphotos.net.