By Kristian Karppi, MD, K&KGC
Robbie Boukhoufane, Portfolio Manager at Schroders: “Adhering to a set of global
principles that promote a robust, fair, liquid, open and transparent market place is consistent
with how we run our FX activities. In addition, the operational and oversight principles are in
line with our internal procedures and governance structures. At the heart of the code is the
requirement to act with integrity. This is one of the firm’s core values, ensuring that we strive
to do the right thing for our clients. Therefore adopting the FX global code was a natural
step for Schroders.”
The benefits of the Global Code
An important amount of the outreach effort will involve ensuring buy side firms appreciate the numerous benefits of adopting the
Global Code.
The direct benefits for the buy side by adopting the Global Code are:
• Marketing publicly with clients, stakeholders and shareholders that the firm adheres with high ethical and conduct standards.
This is the ultimate goal with the Global Code – that good conduct becomes embedded and integrated in the largely
unregulated FX market. This leads to fair play and is in the interest of buy-side firms’ bottom line and also serves the interests of
the clients whose assets firms are managing. The standardised Statement of Commitment, annexed to the Code, which provides
a simple and transparent instrument for firms to publicly demonstrate their commitment to the Global Code.
• Placing your buy-side firm in a legitimate position to set proper expectations on conduct and quality of service in FX trading
activities with your counterparties.
Claas Kohl: “Adherence to the Global Code conveys to other market participants
a strong message of commitment and positive affirmation to the good practices
set out in the FX Global Code. Airbus also sees adherence to the code as a way of
demonstrating compliant behaviour to its stakeholders in the context of a wider
ethics and compliance framework. Corporates who adhere to the Code can expect this
reciprocally from their counterparties in the foreign exchange markets.”
•
Improving the quality of the dialogue with counterparties, which is critical for best execution. The buy side now have a sense of
being able to ask intelligible questions about how their orders are handled, the counterparties pricing or mark-up methodology
etc. Trading during the Last Look window has for example been a contentious subject for many years and the GFXC decided to
strengthen the Code’s language after it reached out to the broader market for input on this narrow topic. Even if not all participants
may be entirely happy with the Last Look practices, there is at least now a single language, which all have to subscribe to.
Robbie Boukhoufane: “Being part of the code from an asset management perspective
is an important step towards contributing towards how it evolves and to ensure the code
continues to promote good practice across new innovation and technology as these are
introduced into the market place”
Winter 2018
www.buysideintel.com
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