Conference Dailys TRADETech FX Daily 2018 Wrap-up | Page 16

THETRADETECHFX DA I LY
opinion
Bringing FX up to Code
HAYLEY MCDOWELL OUTLINES THE IMPORTANCE OF INDUSTRY-WIDE ADHERENCE TO THE GLOBAL FX CODE OF CONDUCT.
T
he introduction of the Global Code of Con-
duct in May last year was a turning point for
the foreign exchange (FX) industry, so it was
no surprise that the Code was a hot topic at the
TradeTech FX Europe conference.
Without doubt, the spirit of establishing such
an industry-wide set of Principles addressing
various issues such as ethics, governance, risk
management, compliance, execution, settle-
ment and information sharing, is a positive
move for FX.
But it is clear - particularly for the buy-side -
that compliance with the Code has been a far
greater task for some firms.
The buy-side’s adoption of the Code has been
slower than anticipated and it’s no wonder, as
asset managers have spent the bulk of their
time, money and other resources over the past
few years implementing new technologies and
frameworks to comply with Europe’s largest and
most far-reaching piece of legislation, MiFID II.
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THETRADETECHFX DAILY
Issue 2
It is true that some of the Principles laid out in
the Global Code may only apply to a few business-
es, so compliance will seem less of a burden for
some than others. However, the benefits of com-
pliance with the Code, particularly in a commercial
sense, are far more evident for the sell-side.
Speakers at TradeTech FX Europe, who were
also heavily involved in the development of the
Code, heralded the positive changes seen in FX
markets since the rules were implemented, and
and it’s difficult to argue that the effects of the
Code have so far been positive. Looking to the
future, it’s clear that the buy-side needs a little
nudge in the right direction when it comes to
the Global Code of Conduct.
Buy-side outreach is a major priority at the
moment according to those who spoke at Trade-
Tech FX, and rightly so. Speakers outlined plans
to ‘lower the bar of adoption’ for asset manag-
ers and identify the problems and motivations
for those that have already signed up.
“Looking to the future, it’s clear
that the buy-side needs a little
nudge in the right direction when
it comes to the Global Code of
Conduct.”
There’s no question that compliance with the
Global Code will cost the buy-side time, money
and attention, much like compliance with MiFID
II. In some ways, forcing compliance and placing
the burden on the buy-side seems slightly
unfair: It was after all the sell-side, indeed some
of the world’s largest banks, that led the FX
scandal which brought investor confidence in
the industry to its knees.
With the Code looking to right the wrongs in
FX, industry-wide adoption will be imperative in
mending that trust and bringing FX into a new
age of transparency and best practice.