Conference Dailys TRADETech FX Daily 2018 Wrap-up | Page 10

THETRADETECHFX DA I LY
in-depth
FOREIGN EXCHANGE
Industry told to adhere
to Global FX Code or face
regulation
EXPERT PANEL OUTLINED THE BENEFITS OF ADHERING TO THE CODE AND FOCUSED ON MORE ADOPTION FROM THE BUY-SIDE.
...(continued from front page)
has been working alongside a number of cen-
tral banks globally on the FX Global Code.
“Despite the number of Principles that apply,
everyone is an important a part of the ecosys-
tem and has to play a role in mending trust in
the industry. It is a privilege that we can sign
up voluntarily, but if the pace of adoption is not
quick enough, then we need to contemplate a
future where we are regulated as an industry.”
The panel also explained that buy-side adoption
of the Global FX Code has been slower than an-
ticipated because the commercial benefit to the
sell-side is more obvious. However, the commer-
cial benefits to the buy-side are increasing due to
the legitimacy of operation for end clients.
“Our priority for the future of the Code is to
expand the buy-side outreach,” added Roswitha
Hutter, secretary of the foreign exchange con-
tact group at the European Central Bank. “The
idea here is to lower the bar of adoption for the
buy-side and identify the challenges and moti-
vations for those that have already signed up –
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THETRADETECHFX DAILY
Issue 2
it’s a call for volunteers in raising awareness.”
The panel also heralded a recent report by NEX
Group which outlined the benefits to execution
and affects on the ‘last look’ method since the
Global Code was established one year ago. The
report analysed activity on its bilateral EBS
Direct trading platform and found a signifi-
settled with less granularity than some market
participants would have liked, but all are happy
with the direction the Global FX Code is evolv-
ing,” Boehler added.
Last look practices provide the opportunity for
banks to decline or reject a trade when the mar-
ket has moved against its position, and have
“The idea here is to lower the bar of adoption for the buy-side and
identify the challenges and motivations for those that have already
signed up.”
ROSWITHA HUTTER, EUROPEAN CENTRAL BANK
cant reduction in hold times, reject rates and a
tightening of spreads since the introduction of
the Global Code.
“There has been a lively and constructive
discussion particularly around ‘last look’, but we
could not come up with the language around
that which satisfied all market participants. We
proved to be a point of contention with FX.
“We are already starting to see the posi-
tive changes of things since the FX Code was
launched a year ago, but we also see that are
some grey areas that we need to work on,”
Stephane Malrait, chair of the FX Committee at
ACI, concluded.