FX Global Code | KPMG | IE
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FX Global Code

FX Global Code

On the back of FX trading concerns uncovered in 2013, the common theme highlighted by subsequent investigations was the lack of clearly defined industry standards.


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In response the Bank of International Settlements, supported by central banks and market participants from 16 global jurisdictions, has just released the FX Global Code - a common set of conduct standards for the FX market. The Central Bank has endorsed the implementation of the Code in Ireland.

The Code is built around six leading principles, including ethics, execution and information sharing, and 55 supporting principles that set out standards of good conduct with the aim of enhancing overall integrity and effective functioning of the FX Market. The Code is expected to apply to a wide range of firms that participate within the FX market. This includes both sell-side and buy-side firms, non-bank liquidity providers, operators of e-trading platforms, as well as firms who provide brokerage, execution, and settlement services for FX.

The Code acts as a supplement to local laws, rules and regulations and so firms still need to comply with these in jurisdictions where FX business is undertaken but they should also ensure that internal policies and procedures reflect the principles of the Code. Firms are encouraged to issue a voluntary ‘Statement of Commitment’ to the Code to attest that the firm has aligned its activities with the principles of the Code. In order to be able to do this, firms should consider the following:

  • How do the principles translate into practical policies and procedures?
  • Is the firm in a position to sign the commitment and adhere to its principles?
  • Who will authorise the commitment for the firm?

The Central Bank, as a member of the Eurosystem, and the broader ESCB has announced it is committed to adhering to the principles of the Code. It will implement the Code itself throughout all FX related activities, and expects an equivalent level of commitment from its regular FX counterparties. The Central Bank’s expectation is that FX market participants in the Irish jurisdiction will evolve their practices in such a way that they are consistent with the principles of the Code and will demonstrate their commitment by issuing the voluntary statement.

The full FX Code of Conduct is available here: www.globalfxc.org

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