HAPPY BIRTHDAY FX GLOBAL CODE...YOU’RE A BIT DISAPPOINTING ALREADY!


Last Look, Fixing, Pre-Hedging, Fintech...yet more reasons...


 the FX Global Code, on appropriate conduct by participants in the Foreign Exchange market was announced and published. It had taken a helluva  of the buy and sell side as well as other industry providers. I remember that time well…it looked like we were now entering a new era of super professional behaviour with many institutions soon publishing and advertising across media their voluntary adherence to the Code. Heady times...though even then...some voices (including mine in an article written here) were not altogether comfortable with it.


So where are we now? One year on...and how’s baby doing? It would be fair to say...a bit disappointing to some of the larger family...though the parents still keep smiling...sometimes it seems through clenched teeth.


There are now eight Registers where prospective    to sign up or else lose access to dealing with the CB. I think you can easily say it has been a success in getting them to sign up...if not totally adhere to the Code. There are fewer large or small corporates, fund managers and non-bank FX providers signed    providers such as brokers, etc. The rest are made up of other FX industry service providers.


Why so few buy side? It seems there’s been pointing   were. Additionally, some very large banks have huge headaches in systems challenges associated with the Code as well as cultural issues such as who actually runs it? Should it be people based and therefore be a HR leader or should it be legalistic and therefore Compliance...and you know how ugly those turf wars in big banks can get. Then there are the Regulators...or rather the competing Regulators who the banks have to satisfy. Sometimes serving two masters leads to really serving none.


Other issues that kept coming up from the buy side   Code on these two...I’ve shrieked enough on these  that there are many, fund managers for example, who are very unhappy at signing up to anything that has acceptance of Last Look or of the pre-hedging of Fixing trades as this places them in a potentially litigious situation with their investors and the like on not looking out for their best interests.


 involved in FX. There are many who see themselves as (that overused title) ‘disrupters’ and don’t see why they should have to sign up to a Code in which all they  abiding one assumes) users to communicate. They  the tech as would say a computer or software provider. This last one is complex and I’m not going to write anymore because it is so complex and my writing about it could not only a) use up valuable space here, b) your valuable time and c) ultimately give myself a headache.


12 | ADMISI - The Ghost In The Machine | July/August 2018


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