The Reserve Bank of New Zealand and the country’s Financial Markets Authority (FMA) have joined a growing chorus of support this week for the recently introduced FX Global Code, welcoming the new measures as a much needed instrument in the international FX marketplace.
Earlier this week, the first part of the FX Global Code of Conduct was published by the Bank of International Settlements. The new paper elaborates in detail on the industry’s need for transparency in execution and governance. The global code is aiming to promote a robust, fair, liquid, open, and appropriately transparent market where different market participants are actively supported by a resilient infrastructure.
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The publication of the Code has been widely supported by the industry, as the Market Participants Group (MPG) was actively involved in its design. More specifically, the code was developed by a partnership of central banks and market participants from sixteen jurisdictions in a bid to provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market.
Thus far, the FX Global Code has been met with near unanimous endorsement, with exchanges, other industry venues, and providers all welcoming its arrival. Indeed, such a cohesive framework was long overdue and will ultimately help the FX industry moving forward.
According to Grant Spencer, Reserve Bank Deputy Governor, in a statement on the subject: “The code of conduct applies to both those buying and selling foreign exchange and is a principles-based code rather than a rules-based code. It aims to create greater confidence in the foreign exchange market and ensure it is functioning as it should; something that is in the interests of all market participants.”
“The code is relevant to all parts of the wholesale FX industry that fall within the FMA’s conduct regulation. We support its objectives, which include the promotion of a robust, fair, liquid, open, and appropriately transparent foreign exchange market,” explained Garth Stanish, FMA Director of Capital Markets, in an accompanying statement.