The Monetary Authority of Singapore (MAS) has today confirmed its commitment to adhere to the FX Global Code of Conduct. Almost a year after the publication of the document by the Bank of International Settlements, the financial watchdog decidedly signaled that it expects its counterparts to be bound by the rules dictated by the new framework that governs FX transactions globally.

Singapore is one of the biggest FX centers globally and is notorious with its strict regulatory framework. The voluntary commitment to the FX Global Code of Conduct has left many industry participants watching and waiting how critical their commitment to the code would be.

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The Basics

The MAS will adhere to the principles of the Code when acting as a market participant and ensure that its internal practices and processes are aligned with these principles. This means that all counterparts which are interacting with Singapore’s financial watchdog will also have to adhere to the code. On their part, their smaller counterparts will also need to commit to the best practices dictated by the document.

Essentially, the Code applies to the wholesale foreign exchange market globally. It sets out principles that promote a robust, fair, liquid, open, and appropriately transparent FX market, underpinned by high ethical standards.

Wholesale FX Market Participants

The MAS has stressed that it “strongly encourages” wholesale FX market participants in Singapore to demonstrate adherence to the Code. The aim of the document is to promote the integrity and effective functioning of the global FX market.

“The Institution confirms that it acts as a Market Participant as defined by the Code, and is committed to conducting its FX Market activities in a manner consistent with the principles of the Code. To this end, the Institution has taken appropriate steps, based on the size and complexity of its Activities, and the nature of its engagement in the FX Market, to align its Activities with the principles of the Code,” the MAS has highlighted in an official statement.

Major market participants have been voicing their commitment to the code in light of its anniversary. Recently NEX Group has outlined that as many as 65 percent of its clients have committed to the framework. Meanwhile, earlier in May, the ACI Financial Markets Association (FMA) presented a product designed to test the knowledge of the code amongst company employees.