24 January 2025
The Global Foreign Exchange Committee (GFXC or Committee) has completed its review of the FX Global Code (the Code). The December 2024 version of the Code, which will supersede the July 2021 version, updates its principles of good practice in the foreign exchange market in two key areas. Alongside the revised Code, the Committee will also publish enhanced Disclosure Cover Sheets (DCS) for Liquidity Providers and Platforms.
The GFXC has updated the Code following an extensive consultation process with local FX committees (LFXCs) worldwide and a broad range of Market Participants through a public Request for Feedback in October 2024. Updates have been made to five of the Code’s fifty-five principles to strengthen the Code’s guidance on FX Settlement Risk, as well as to increase transparency around certain types of FX transactions and the use of client-generated data on electronic trading platforms.
In addition, the DCS for Liquidity Providers and Platforms were also extended with the objective to enhance transparency and comparability across providers on the use of FX data. The GFXC encourages the uptake of the DCS, which are available on the GFXC website.
The GFXC met virtually on 5-6 December 2024 to endorse the outcomes of the Code Review. The GFXC Chair, Gerardo García, commented that: “In terms of the 2024 Code Review, there has been strong GFXC support for the final proposals of the FX Settlement Risk and FX Data Working Groups. The Code amendments clearly address the concerns that Market Participants and LFXCs expressed during the review process and are consistent with the objective of having a more robust and transparent FX market.” On behalf of the Committee, he also expressed gratitude to the two GFXC co-Vice Chairs, Simon Manwaring (NatWest Markets) and Stuart Simmons (QIC), for leading the Working Groups’ efforts in a successful manner. In turn, Mr Manwaring and Mr Simmons thanked the Working Groups’ members for their dedication and contributions to improving the Code and its accompanying materials.
As of December 2024, 1,328[1] entities globally have indicated their adherence to the Code’s principles by signing a Statement of Commitment (SoC). With the publication of the updated Code, the GFXC encourages all market participants to review the amendments and to consider renewing their SoC, taking into account the nature and relevance of the updates to their FX market activities. With this in mind, the Committee considers that a 12-month period should be sufficient for those affected by the changes to align their practices with the Code’s principles. More generally, the GFXC expects that all Market Participants conduct appropriate steps to ensure that their SoC remains accurate over time.
The December 2024 version of the Code will also include new links in its Foreword section that highlight some of the existing GFXC Reports. These reports are intended to facilitate wider awareness and understanding of specific aspects of the FX market and, where relevant, describe how they relate to the Code’s principles While these reports are not part of the Code or the SoC, they contain useful explanatory material and offer insight into the practical implementation of the Code principles.
A summary of the outcomes of the 2024 Code Review highlighting the specific changes to the Code is also being published, along with a document that includes the responses received by the GFXC to the Request for Feedback on the proposals to amend the Code and the DCS.
[1] It should be noted that this statistic may entail some double counting as some firms’ SoC might be on multiple registers.