The Financial Conduct Authority (FCA) announced this Wednesday that it recognizes both the FX Global Code and the UK Money Markets Code under its codes recognition scheme.
The regulator’s codes recognition scheme recognizes industry codes for unregulated financial markets and activities. The FX Global Code and the UK Money Markets Code are the first to be recognized by the British watchdog.
The relevance of this move is highlighted in the FCA’s statement published today: “Individuals subject to the Senior Managers and Certification Regime (SM&CR) need to meet the requirements for market conduct, for both regulated and unregulated activities.
“Behaviour that is in line with an FCA recognised code, such as the FX and MM Codes, will tend to indicate a person subject to the SM&CR is meeting their obligation to observe ‘proper standards of market conduct.’”
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FX Global Code Continues to be Adopted
Maintained and updated by the Global Foreign Exchange Committee, the FX Global Code aims to increase the integrity and functionality of the wholesale forex market by setting global principles of good practice standards.
As Finance Magnates reported, numerous firms, particularly on the institutional side within the forex space, have committed to the FX Global Code, such as LCH, the Moscow Exchange, and more. However, adoption in the retail trading space has been slower.
The UK Money Markets Code, on the other hand, falls under the Money Markets Committee. Instead of the FX market, this code covers the deposit, repo and securities lending markets in the UK.
Today’s announcement from the FCA follows on from the regulator having consulted on the recognition of the codes in December of last year. Responses to the consultation unanimously agreed that the FCA should recognize both codes.
“The FCA’s SM&CR rules have not changed as a result of our code recognition scheme, nor has its powers or the circumstances in which it supervises or enforces its SM&CR rules. Firms and their Senior Managers, under the SM&CR, are expected to train, monitor and where necessary, discipline their staff in relation to the Individual Conduct Rules,” the regulator said.