30 January 2020
The Global Foreign Exchange Committee (GFXC) today published a report on anonymous trading in the foreign exchange market and released results from its third annual survey on the FX Global Code. The GFXC also released the minutes of its 4-5 December meeting and accompanying presentation slides.
The report “The Role of Disclosure and Transparency on Anonymous E-Trading Platforms” describes the significant role played by anonymous trading in the FX market and highlights the key attributes that market participants need to understand when engaging on these platforms. The report discusses the relevance of the Code’s principles to anonymous trading, focussing on the need for appropriate disclosures and transparency around trading practices. In reviewing the Code during 2020, the GFXC will consider additional guidance around certain aspects of anonymous trading such as the usage of ‘tags’ (unique identifiers) and the role of prime brokers.
The 2019 GFXC Survey measured the awareness, adoption, implementation and effects of the FX Global Code for market participants. In addition to a section gathering input for the three-year review of the Code, the Survey included two new focus areas: electronic trading and disclosures. The survey results suggested that awareness of the Code remained high and levels of adoption continued to increase. The majority of respondents thought that the Code has had a positive effect on overall market functioning. The feedback provided by survey respondents on the three-year review, as well as their perception on the quality of disclosures, will inform the work of the Committee in 2020.
“In preparing for our review of the Code, the GFXC has received input from right across the industry,” said Guy Debelle, Chair of the GFXC. “The overall message is that the Code remains generally fit-for-purpose and that its guidance has contributed to better market functioning. There are however some areas for improvement and the feedback we have received has been valuable in prioritising our areas of focus.”
To support the industry’s understanding of the Code and the adoption process, the GFXC updated its webpage to include frequently-asked-questions (FAQs) about the Code. In addition, case studies of buy-side firms that have adopted the Code are now available. These case studies highlight the steps taken by firms to adhere to the Code, including how they applied the Code’s principles in a manner proportionate to their business. Greater buy-side engagement remains an ongoing focus for the GFXC.
The GFXC also acknowledged the open letter it received from the Bank for International Settlements’ (BIS) Markets Committee, setting out the recommendations from their assessment of the Code’s effectiveness. These recommendations will also inform the work of the Committee in 2020, particularly the three-year review.
The next meeting of the GFXC will take place in Zurich in June 2020.
Press inquiries:
Cécile Lefort
Reserve Bank of Australia