Reuters reported that the European Central Bank (ECB) is calling on the currency pairs trading banks with which it collaborates to sign the new international forex code of conduct.
The ECB is the latest financial entity to join the prominent central banks that are pressuring forex trading banks to commit to the aforementioned code of conduct, following two years of work by industry officials around the world. Until now, the ECB expressed legal concerns, which translated to merely inviting its forex trading counterparts to sign the contract. At that stage in the process, certain central banks made the signing compulsory.
The ECB, however, had a change of heart and decided to join the other major banks that made the contract mandatory. Now all its foreign exchange (FXCG) members are required to commit to the code of conduct. According to Reuters, joint efforts by other central banks means that it is improbable that any major financial entity will operate outside of this framework.
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ECB commented: “FXCG members will be required to demonstrate their institutions’ commitment to the FX Global Code, in line with the FXCG’s updated Terms of Reference.”
Federal Reserve, Reserve Bank of Australia Join ECB’s Call to Sign Up
The FX Global Code launched in May after central bank representatives decided that nearly four years of price-rigging scandals had done enough damage to the financial market.
The Federal Reserve and the Reserve Bank of Australia joined the ECB in its demand that all financial institutions trading foreign exchange must sign up. Others, on the other hand, stated they were in need of more time in order to issue formal statements on the matter.
This week, IG Group signed up for the FX Global Code, and Invast announced that it will be holding a summit endorsing the contract at the O-Bar on level 47 of Australia Square.