FX Global Code of Conduct: One year on – has behaviour improved?
It is now well over a year since the launch of the FX Global Code of Conduct in May 2017.
This was a high-profile response to the series of scandals and huge fines imposed by regulators and authorities globally in 2013-15 for FX rate manipulation and related misconduct. In the UK, the conduct was so severe that it resulted in £1.4 billion in Financial Conduct Authority fines and brought about the launch of the FCA FX Remediation Programme.
The aim of the code was, and is, to restore trust and credibility to FX markets. It seeks to drive best practice and improved behaviours through a series of 55 principles — but importantly not rules — that are designed to promote the integrity and effective functioning of wholesale FX markets. Is it working, and can a global code really be expected to improve behaviours? There may be some initial grounds for scepticism. Adherence with the code is voluntary: participants sign up to a public statement of commitment, but they do not have to…