The Code is a set of global principles of good practice in the foreign exchange market. It contains 55 principles that provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. The principles cover ethics, governance, execution, information sharing, risk management and compliance as well as confirmation and settlement. The Code does not impose legal or regulatory obligations on market participants, nor does it substitute for regulation. It is intended to serve as a supplement to any and all local laws, rules and regulations by identifying global good practices and processes.

The Code is available on the Global Foreign Exchange Committee’s website. You can find and download the latest version of the Code here.

You can also see how the Code has changed by looking at previous versions, available here.

In 2015 BIS Governors commissioned its Markets Committee to develop a single, global code of conduct for the wholesale FX market. A key objective of this commission was to help restore trust and confidence in the FX market following a number of high profile FX misconduct cases that came to light in 2013 and 2014. These cases highlighted the fact that the numerous, existing regional FX codes of conduct had been ineffective due to a lack of awareness of, or adherence to, these codes by some market participants. 

The Code was developed by a partnership of central banks and private sector market participants under the auspices of the BIS Markets Committee. The work was supported by central banks from 16 jurisdictions around the globe and market participants spanning the sell-side, buy-side and FX infrastructure providers across major financial centres in both advanced and emerging market economies.

The Code promotes a robust, fair, liquid, open, and appropriately transparent FX market. The Code is intended to support the market by promoting high ethical and professional standards, enabling market participants to confidently and effectively transact in the market place.

More information on the establishment of the Code can be found here.

The Global Foreign Exchange Committee is a forum bringing together central bank sponsored foreign exchange committees to promote collaboration and communication on FX matters, exchange views on trends and developments in FX markets as well as promote, maintain and update on a regular basis the Code. The Committee maintains the Code and promotes mechanisms to support adherence. The Committee assesses regularly whether particular foreign exchange market developments warrant specific revisions to the Code and when judged appropriate, undertake a comprehensive review of the Code.

More information on the Committee can be found here.

All institutions engaging in the wholesale FX market can and are encouraged to adopt and adhere to the Code. This includes sell-side and buy-side entities, non-bank liquidity providers, operators of E-Trading Platforms, and other entities providing brokerage, execution, and settlement services (please see the Code for a more exhaustive guide). Institutions can signal their adherence by signing a Statement of Commitment to the Code, available here.

The Code applies to all institutions engaging in the wholesale FX market, regardless of size, type or frequency of engagement (see the Code for an exhaustive guide of institutions). For the purposes of the Code, a market participant is a person or organisation that:

1. is active in FX markets as a regular part of its business and is engaged in the activity of the purchase or sale of one currency against another, or in transactions designed to result in gains or losses based upon the change in one or more FX rates, such as derivatives, whether deliverable or non-deliverable, either directly or indirectly through other market participants; or
2. operates a facility, system, platform, or organisation through which participants have the ability to execute the type of transactions described in (i); or
3. provides FX benchmark execution services; and
4. is not considered a retail market participant in the relevant jurisdiction(s).

The term also includes any personnel who conduct the above activities on behalf of a market participant.

The Global Foreign Exchange Committee’s Global Index of Public Registers acts as a central location for the Statements of Commitment, providing a comprehensive view of market participants’ commitment to good practices. Any market participant that has signed the Statement of Commitment and wishes to make it publicly available can contact one or more of the Participating Public Registers in the Global Index and ask for its Statement of Commitment to be published there. The contents in all Participating Public Registers are indexed to and visible on the Global Index and can be navigated using the search function. For more information with an overview of Code adoption in the FX market, see Question 7 in the 2019 GFXC survey.

Adopting and signing up to the Code brings benefits to both your institution and the FX market as a whole.

1. It provides the opportunity to benchmark your institution’s internal processes and practices against a set of widely recognised principles of good practice.
2. It offers valuable understanding on best practices related to key topics in the FX market and can serve as a source and reference for internal guidelines.
3. It sends a message to internal and external stakeholders that your institution is an informed, responsible and competent market participant, committed to conducting FX Market activities in a manner consistent with the principles of the Code.
4. By signing up to the Code, your institution joins a large number of market participants in improving the FX market, thereby also contributing to a more fair, effective and resilient FX market.

For more information on the Code’s impact on behaviour and market practices, see Question 11 and 13 in the 2019 GFXC survey.

In addition to the benefits outlined in FAQ 8, the Code provides a number of benefits for buy-side institutions, such as non-financial corporates, insurance companies, pension funds, asset management firms and hedge funds.

1. It can foster a more level playing field whereby buy-side firms are better able to have a constructive dialogue with their liquidity providers on their execution, order handling and information management.
2. The Code provides a simple and powerful “off the shelf” way of educating and promoting globally recognised principles of good practice among your internal FX trading and operations staff, complementing other tools and regulations.
3. It sends a clear signal to your sell-side counterparties of the standards you expect them to uphold in their dealings with you, which in turn strengthens market discipline.
4. Committing to the Code also sends a positive signal of your commitment to good practices to your clients and external stakeholders.
5. Signing up to the Code gives buy-side institutions a stronger voice in the ongoing development of the Code.
6. By raising the ethical and professional standards of all market participants, the Code contributes to providing protection and transparency to price takers.

See the webinar on the buy-side case for signing on to the FX Global Code.

Market participants wishing to sign up to the Code can find more information in the Global Foreign Exchange Committee’s presentation “An introduction to the FX Global Code” and Roadmap to Adherence. A collection of anonymised case studies can be found by here.

Feedback from a broad range of market participants suggests that the process of adopting and signing up to the Code typically takes 3-12 months.  

The time taken could vary across market participants depending on a number of factors, including:

• the size and complexity of its FX activities;
• the nature of its engagement with the FX market;
• how closely its existing processes are aligned with the Code’s principles; and
• the resources available to conduct the process.

For more information on the time it has taken market participants to implement the Code, see Question 7a in the 2019 GFXC survey and for more information on various proportionality considerations, see FAQ 17.

The Global Foreign Exchange Committee takes no position on whether institutions should involve a consultant or implement the process using internal resources. Each institution should determine the most appropriate way, taking into account individual circumstances. A number of consultants are available to support market participants who are considering adoption of the Code. The Global Foreign Exchange Committee has also provided educational material here to support market participants who choose to undertake this task using internal resources.

A collection of anonymised case studies can be found by here.

In general, market participants should consider reviewing the internal policies, processes and procedures related to its own FX activities. The Roadmap to Adherence sets out a number of steps that could be considered before signing the Statement of Commitment. The gap analysis template provides a starting point for gap analyses between the principles in the Code and the market participant’s own policies, processes and practices and can be used as an internal project management tool to implement the Code. Market participants should also consider what type of governance, controls and approval processes would be appropriate for them to implement before signing the Statement of Commitment.

The implementation processes and steps will vary among market participants, depending on the complexity of their FX activities. Ultimately, the decision of which steps should be taken in support of a market participant’s Statement of Commitment, and in what form, resides with each individual market participant.

For more information on various proportionality considerations, see FAQ 17 and for more information on what steps firms have been taken or planned to take to embed the Code in their practices, see Question 7f in the 2019 GFXC survey.

The business areas involved in the review may differ across institutions and could include representatives from Senior Management, Trading and Sales, Compliance, Risk Management, Operations, IT, Legal and Human Resources. The size, complexity and institutional setup of a market participant’s FX activities will likely determine which business areas should be involved in signing up to the Code. Where several business areas are involved, a project team could be established to facilitate the implementation. For more information on how various firms have implemented the Code, see Question 7d and 7e in the 2019 GFXC survey. A collection of anonymised case studies can be found by here.

The Code is intended to apply to any market participant as defined in FAQ 6.

All principles of the Code are informative as to what constitutes good practice in the FX market and are therefore useful for all market participants to read and understand. There are certain principles that apply to all market participants under all circumstances. Much of the conduct and spirit underlying these principles, such as behaving in an ethical and professional manner, should apply naturally. However, not all principles will apply to all institutions in the same way and different firms will apply the Code in different ways. The nature of each market participant’s FX activities may mean that some principles will directly impact on the institution’s internal FX activities and operations. For example, a number of principles in the “Execution” section apply directly to market makers and execution providers rather than the buy-side of the market.

Accordingly, each market participant should review all the Code’s principles and determine which of them directly impact its own FX activities, and the extent to which steps should be taken to implement those principles in the institution’s internal policies and procedures. The GFXC’s gap analysis template is free to use and provides a starting point for this exercise. In addition, the sample case studies walk through how different buy-side market participants adhere to the Code and take into account concepts like proportionality.

It is advisable for market participants to be familiar even with the principles which do not directly impact their FX activities. Understanding what is expected of other market participants will facilitate improved monitoring and oversight of practices in the FX market, and thereby improve general market conduct.

The FX market features a diverse set of participants who engage in the FX market in different ways and across various FX products. Both the Code and the Statement have been written and should be interpreted with this diversity in mind.

Each market participant should carry out an appropriate internal assessment to determine what considerations and actions are necessary and sufficient to adopt and adhere to the Code. This should reflect the size and complexity of its own FX Market activities, the nature of its engagement with the FX Market and take account of Applicable Law. It is expected for all institutions to align their FX activities with the Code’s principles through a gap analysis and establishing and maintaining policies, procedures and controls reasonably designed to support their Statement of Commitment. Larger, more sophisticated institutions with a higher level of engagement in the FX market may also choose additional steps to support their Statement of Commitment. Many of the Code’s principles also specifically reference appropriateness for example with regards to policies, procedures, practices, structures, arrangements or mechanisms. It is envisaged that the larger, more complex and sophisticated an institution’s FX activities are, the institution should have undertaken a more comprehensive and detailed internal exercise to ensure its adherence to the Code’s principles.

The GFXC has published a Roadmap to Adherence which may be useful in this exercise. A collection of anonymised case studies can be found by here. Ultimately, the decision of what steps should be undertaken in support of a market participant’s Statement of Commitment, and in what form, resides with each market participant.

The concept of proportionality does not offer some market participants the opportunity to set lower standards than others. Rather it aims to ensure that the steps taken by market participants to adopt and adhere to the Code are tailored to appropriately reflect the size and complexity of the market participant’s FX market activities and as well as the nature of its engagement with the FX market.

Given that adherence to the Code is voluntary, there is no pre-defined deadline to signing the Statement of Commitment. Nevertheless, all FX market participants are expected and encouraged to implement the Code’s principles in their internal work practices in a timely manner since their widespread adoption will support a common understanding of what constitutes global good practice in the FX market. In some jurisdictions, codes of best practice are recognised by the national competent authority and market participants should address adherence accordingly.

The advantage of publishing the signed Statement of Commitment is that it publicly demonstrates adherence to the Code against a “common industry standard” in a recognised and consistent manner. Use and publication of the Statement of Commitment provides a positive signal and confidence to clients, counterparties and the wider market that the market participant commits to adhere to principles of good practice when engaging in the FX market. Demonstrating a commitment to good practice enables you to clearly state the standards you expect your counterparties to uphold in their dealings with you, and your intention to hold them to those same standards. Widespread use of the Statement of Commitment will support a common understanding across the FX market of what constitutes good practices, thereby supporting a more fair, resilient and effective FX market. For more information on firms’ approaches to issuing the Statement of Commitment, see Question 7h in the 2019 GFXC survey.

With a growing number of market participants choosing to sign the Statement of Commitment, the Code becomes increasingly embedded in the FX industry as “common industry standard”. Market participants that adopt and sign up to the Code

1. give themselves a competitive edge when it comes to demonstrating their commitment to best practice which may help in attracting investors and clients.
2. support a fair and effective market and ensures that their FX market activities are in line with recognised industry standards.
3. send a positive signal to counterparties and stakeholders who place emphasis on adherence to best practices.

The Code is voluntary and is intended to serve as a supplement to local laws, rules and regulations but signing up to the Code is generally a prerequisite for joining Local Foreign Exchange Committees (LFXCs) as members and is expected by many central banks on their FX counterparties. Adoption of the Code is furthermore an important sign that an institution is engaging in the FX Market responsibly in accordance with the principles in the Code. Widespread adoption of the Code across the broad spectrum of market participants is vital to the integrity and effective functioning of the FX Market. It is also in everyone’s interest that all market participants embrace the Code’s principles of good practice as it supports a common understanding across the FX market of what constitutes good practices.

The Code is intended to apply to all market participants. Some institutions may require some time to adopt all relevant aspects of the Code and monitor adherence accordingly. The steps to adopt and monitor adherence should be proportional to the size and complexity of the market participant’s FX activities (see FAQ 17 for more information). The Global Foreign Exchange Committee has made available a toolkit of resource material here. The principle of proportionality and the resource material are intended to enable as many market participants as possible to implement and sign up to the Code.

It is important that the entire market take steps to implement the Code in a timely manner. Similarly, it is vital that all market participants recognise that adherence to the Code’s principles is an implicit part of participation in the global wholesale FX market, and view the resources required for its adoption as ultimately necessary to ensure and be able to demonstrate practices consistent with the global principles.

There is no formal time limit for adherence (see FAQ 18) and no reporting or auditing requirements (see FAQ 29 and 33). A collection of anonymised case studies can be found by here.

The Statement of Commitment is a standardised statement which provides a common means for demonstrating a commitment to adhere to the Code. It can be found here.

The Statement of Commitment has been developed to support the objectives of the Code. It provides a means by which (i) market participants can signal their intention to adhere to the Code’s principles of good practice, and (ii) market participants, and others, can more objectively assess the operational and compliance infrastructure of other market participants.

Signing the Statement of Commitment represents that a market participant:

1. supports the Code and recognises it as a set of principles of good practice for the FX market.
2. is committed to conducting its FX market activities in a manner that is consistent with the principles of the Code.
3. considers that it has taken appropriate steps, based on the size and complexity of its activities, and the nature of its engagement in the FX market, to align its activities with the principles of the Code.

Whether and to what extent a market participant elects to utilise the Statement of Commitment is a decision for each market participant.

The Statement of Commitment could be used by an institution in a variety of ways. The Global Foreign Exchange Committee encourages all market participants to sign the Statement of Commitment and publish it on one of the Participating Public Registers to the Global Index. Alternatively, market participants may publish the Statement of Commitment on their website or choose to only inform its counterparties on a bilateral basis. The Statement of Commitment may also be used by market participants in connection with membership to regional foreign exchange committees where applicable.

There is no explicit requirement for the Statement of Commitment to be signed by a specific individual or body within an institution. It is anticipated that the individual, group of individuals or body, responsible for approving the market participant’s use and publication of the Statement of Commitment will have appropriate oversight of the market participant’s FX market activities and the authority to make statements of the type contained in the Statement of Commitment. A collection of anonymised case studies can be found by here.

Institutions that have adopted the Code should consider what steps they will take to review their activities for alignment with the Code’s principles over time to ensure its Statement of Commitment remains true and accurate through time. The frequency of review depends both on the institution’s internal setup and developments in the FX market. For simplicity, some institutions may wish to set a regular review schedule.

The institution should consider how its FX activities and related processes are changing over time, particularly the nature of its engagement in the FX market. This might include but is not limited to operational changes such as (i) new means of executing transactions, for example electronic trading, (ii) providing new ways for clients to access markets, such as prime brokerage services or algorithmic trading or (iii) updated confirmation and settlement procedures. If there have been any changes which might impact an institution’s adherence to the Code, a review should be carried out.

The structure of the FX market is constantly changing and the Code will be periodically reviewed and adapted to appropriately reflect these changes as well as what is collectively judged to be good market practice. The institution should therefore also consider whether external FX market developments and future updates to the Code warrant a review of its Statement of Commitment.

Each market participant will need to determine at what level to sign the Statement of Commitment to the Code, depending on its own institutional circumstances. The Statement of Commitment has been designed with sufficient flexibility to accommodate both group entities signing a single, group-level Statement of Commitment, and individual group entities signing their own Statement of Commitment. Factors such as the type of FX activities, business model, corporate structure and jurisdictional regulatory differences may play a role in the decision. The Global Index of Public Registers demonstrates that market participants have taken a variety of approaches to signing the Statement of Commitment. A collection of anonymised case studies can be found by here.

An institution may outsource one or more aspects of its FX activities to external entities who may then act on its behalf in the FX market. The institution is still encouraged to adopt the Code for all FX related activities within their remit, even when they engage service providers for some aspects of their business, including outsourcing execution.

In addition, the institution should be mindful whether the external entity, who acts on its behalf, has signed up to the Code to avoid exposing itself to unwanted risks. The institution may benefit from a dialogue with the external entities to understand how they approach the Code and assess whether this is in line with the institution’s Code-related expectations.  

After signing the Statement of Commitment, market participants should ensure that the relevant staff are aware of the Code and put in place appropriate processes to monitor the institution’s adherence to the Code.

Formal or informal training programmes, for example via e-learning tools or workshops, could be helpful in deepening awareness and understanding of the Code. Market participants are also recommended to review the case for, and if needed, to update any FX-related disclosure statements. Guidance is set out in the GFXC’s report ‘The Role of Disclosure and Transparency in the Global FX Market‘. For more information on market participants’ views on the topic of disclosures, see Questions 17-20 in the 2019 GFXC survey.

The decision to audit rests with each market participant. The GFXC does not take a view as to the appropriateness of an audit. Market participants may choose to have adherence to the Code audited alongside their audit commitments within the risk management and compliance guiding principles (see the Code’s Principle 28).

Some jurisdictions have chosen to recognise, adopt or otherwise use the Code as part of their regulatory framework, and in those circumstances, certain audit obligations may exist.

Training and educating staff on the Code, for example via e-learning tools or workshops, can be an important part of ensuring that an institution’s FX activities are conducted in line with the Code’s principles. Depending on the size, complexity and the nature of engagement in the FX market, the market participant may decide to establish dedicated staff training or embed additional training into existing programmes. Training for relevant staff can be developed internally for example in the form of e-training or workshops, or by using external training service providers. For more information on what forms of training on the Code firms have adopted, see Question 9 in the 2019 GFXC survey. 

Yes, as you would monitor any of the standards of good practice you expect your institution to meet. Signing the Statement of Commitment to the Code means that a market participant has taken appropriate steps, based on the size and complexity of its activities and the nature of its engagement in the FX market, to align its activities with the principles of the Code. Market participants should therefore consider what the appropriate steps are to ensure that their Statement of Commitment remains accurate over time. Some examples of the steps that could be considered can be found in the Roadmap to Adherence.

The GFXC takes no position on whether an institution would take on any legal obligations by signing the Statement of Commitment. This will depend upon the laws, rules, and regulations applicable to it and the FX Market in each jurisdiction in which it does business. As part of the process of adopting the Code, an institution should consult with their legal counsel as needed.

The Code is not intended to impose legal or regulatory obligations on market participants, nor is it a substitute for regulation. Rather, it is intended to supplement any and all local laws, rules and regulations by identifying global good practices. Some jurisdictions have chosen to recognise, adopt or otherwise use the Code as part of their regulatory framework, and in those circumstances, the Code’s principles may form a source of supervisory expectation or regulatory requirement.

Market participants must familiarise themselves with laws, rules and regulations applicable in each jurisdiction in which it does business – this is reflected in principle 25 of the Code.

In addition, Market participants should consider the nature and complexity of their FX activities in deciding whether to sign the Statement of Commitment. For more guidance on factors which may be relevant to this decision, please see the section ‘What is the process for signing up to the Code?’

There are no reporting obligations to the GFXC upon signing the Statement of Commitment. Adherence to the Code imparts no additional reporting obligations beyond what is required by applicable laws and regulations. If you are unsure, please reach out to your local regulator for further enquiries.

If you as an individual believes that your institution or another market participant has acted in a manner that is inconsistent with the Code, there are a number of steps that could be taken.

Individuals should consult with the appropriate parties internally or externally having regard to the circumstances. Conduct that is inconsistent with the Code may also be inconsistent with applicable laws or regulations in some jurisdictions, and as such there may be reporting obligations to the appropriate authorities. Be aware that the Code states that “Market Participants should have appropriate policies and procedures to handle and respond to potentially improper practices and behaviours effectively” (see the Code’s Principle 7). Principle 7 further states, “[F]irms should be clear – about where and how to report concerns about potentially improper practices and behaviours – confidentially and without fear of reprisal or retribution.”  This may include consulting with legal and/or compliance internally, and/or with the appropriate authority.  There may also be anonymous hotlines or other programs available at your firm that could facilitate confidential reporting of your concerns. This may include consulting with legal and/or compliance internally, and/or with the appropriate authority. There may also be anonymous hotlines or other programs available at your institution that could facilitate confidential reporting of your concerns.

If the matter is not specific to a particular market participant but of broader relevance to the FX market and you think it is a topic that the Global Foreign Exchange Committee should consider for future reviews of the Code, then you may wish to submit feedback to the Global Foreign Exchange Committee, via your Local Foreign Exchange Committees (LFXCs), as part of the Code review process.  It is important to note that the Global Foreign Exchange Committee is not a regulatory authority and has no power or mandate to investigate or take action on conduct by market participants that is not consistent with the Code.

1. More information on the FX Global Code, earlier versions and material related to its establishment can be found here.
2. More information on how to adopt the Code, including the Statement of Commitment and other educational material, tools and resources can be found here.
3. Other publications, including research reports, results of Global Foreign Exchange Committee surveys and public consultations can be found here.
4. Aside from the Global Foreign Exchange Committee website, you can reach out to a Local Foreign Exchange Committees (LFXCs) in your region for more information, here.
5. More information on the Global Foreign Exchange Committee, its composition and terms of reference can be found here. You can find tools, resources and education material under the “Adopting the Code” section on the Global Foreign Exchange Committee’s website.

There are a number of associations and organisations that can offer support and assistance on signing up to the Code. If you require assistance, we encourage you to reach out to your local association or your Local Foreign Exchange Committee (LFXC) – see more information here. You can also contact an external consultant – see more information in FAQ 12.

Market participants may contribute to the Code’s development in a number of ways. Institutions engaging in the FX market are regularly invited to participate in Global Foreign Exchange Committee surveys. The Global Foreign Exchange Committee also initiates public consultations on specific topics to seek feedback on the developments in the Code.

More information on surveys, consultations and reports can be found here.

Organisations and associations can also contribute to the Code by setting up a public register to enable firms to demonstrate their commitment to the Code (more information is available here). Market participants are also welcome to contact its Local Foreign Exchange Committees (LFXCs) or the Global Foreign Exchange Committee secretariat at email@globalfxc.org and share general, non-institution specific feedback and insights on trends and developments in the FX market.

The Global Foreign Exchange Committee is a forum which brings together central banks and private sector participants. Members of the Global Foreign Exchange Committee include regional Foreign Exchange Committees or similar structures. Each member FX Committee designates a central bank and private sector representative for the Global Foreign Exchange Committee. Individuals or institutions therefore can only take part in the Global Foreign Exchange Committee through being designated as a representative by one of the Global Foreign Exchange Committee’s Member FX Committees. Any market participant can reach out to and apply for membership to its regional FX Committee which is a member of the Global Foreign Exchange Committee. More information is provided in the Global Foreign Exchange Committee’s Terms of Reference.