The Bank of England (BoE) has published a speech given by Chris Salmon (Executive Director of Markets at BoE), on the global code of conduct for the foreign exchange (FX) markets (the Code). Points of interest in the speech include the following:
- the BoE is committed to developing an appropriate review mechanism so that the Code stays up to date. The BoE intends to announce further details in 2017;
- to help ensure that the Code is beneficial, it needs to be embedded in firms’ practices: training and education are particularly important, and firm should have the right policies and procedures in place to ensure that they are able to monitor how successfully they have embedded the Code;
- firms should be able to demonstrate publicly that their behaviour and practices in the FX market are in line with the Code’s principles. Mr Salmon notes that the widespread use of a common public attestation could be a powerful tool in this respect as it would provide a strong signal of a firm’s commitment to following good practices and help focus the mind of the firm’s senior management who would be asked to sign the attestation; and
- Mr Salmon states that firms, and particularly senior management, should start considering the steps they will take to support the Code. He states that the key question senior management should be asking is how can they set a strong positive tone and ensure that their firm’s incentives and promotion policies are aligned with responsible engagement in the market and the long term reputation of the firm.
The Code is due to be launched in May 2017.
View BoE speech on FX global code, 23 September 2016