The Global Foreign Exchange Committee (GFXC) has announced its intention to update Principle 17 of the FX Global Code (the Code).

In the light of feedback received on “last look” practices in the FX market, the GFXC has concluded that Principle 17 should indicate that market participants should not undertake trading activity that utilises the information from the client’s trade request during the last look window. At the same time, the GFXC also agreed that Principle 17 should clarify the conditions under which certain trading arrangements, often referred to as “cover and deal”, may be distinguished from the “last look” guidance.

In reaching this judgement, the GFXC balanced the feedback that highlighted the potential for trading activity in the “last look” window to benefit a client with other feedback that emphasised the risk that clients could be disadvantaged by such trading and that it could undermine the overall integrity of the FX market. In line with the GFXC’s review process, finalised language will be shared with local FX committees before being published by the end of 2017.

The GFXC has also commissioned further work on two areas. These are “cover and deal” trading arrangements and disclosures regarding “last look” on anonymous e-trading platforms. In both cases the objective is to determine whether the GFXC should enhance its guidance about good market practice, potentially through the development of additional illustrative examples for the Code. Separately, the GFXC reaffirmed the importance of expanding the global reach of the Code and agreed a number of steps to secure this outcome.

View GFXC to update Principle 17 of FX Global Code,15 November 2017