LCH Ltd, the multi-national clearing house controlled by the London Stock Exchange Group, has released a statement of commitment to the FX Global Code and the UK Money Markets Code on Monday.
The FX Global Code was developed to set international principles for good practices in the forex market. The UK Money Markets Code, on the other hand, sets out the standards and best practices in the deposit, repo and securities lending market in the United Kingdom.
LCH joins the club
The clearinghouse joins a large group of more than 100 other market participants to commit to the global code. These include central banks and banks including Barclays, Citi, Deutsche Bank and JPMorgan Chase & Co. In addition, the code is also supported by electronic trading platforms such as Bloomberg and Thomson Reuters.
Make or Break Decision: Finding the Liquidity Provider Thats Best for YouGo to article >>
Only on Friday, Finance Magnates reported the Moscow Exchange (MOEX) announced that it signed a statement of commitment to the FX Global Code. The exchange, which is the global center of liquidity for the ruble, was the first Russian financial institution to commit to the code.
Commenting on the announcement, Martin Pluves, CEO at LCH Ltd, said: “as a global clearing house, trust and efficiency has always been a core part of our values. We’re pleased to set out our commitment to both the FX Global Code and the UK Money Markets Code and we are supportive of their objectives to improve transparency and standardisation across the industry.”
With the global code being widely accepted and promoted within the forex markets, as of May, firms can check whether their counterpart has signed up to the good practice commitment. This is thanks to the Global Foreign Exchange Committee launching a website where the Global Index lists the Statements of Commitment to the FX Global Code of Conduct from the selected registers.
Through its Collateral and Liquidity Management function, LCH is an active participant in the forex markets. According to the statement, in 2017 the clearinghouse held average daily investments of €66.5 billion of cash collateral. LCH’s ForexClear service allows investors to clear FX NDFs and physically delivered FX Options and their hedges.