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The FX Global Code of Conduct outlines an accepted set of global principles of good practice in the forex market.
Published in August 2018, the Code helped develop a common set of guidelines to foster the integrity and effective functioning of the wholesale forex market.
The effort spanned multiple years and was developed by a partnership between both central banks and market participants across 16 global jurisdictions.
Why the FX Global Code of Conduct is a Global Collaboration
In particular, the Code constitutes one of the strongest intra-industry collaborations across any market.
A total of 15 asset management firms and corporates, 30 domestic and overseas banks, 20 trade associations, and 16 central banks collaborated on the Code’s development and final form.
In terms of widespread industry practices, the FX space had lacked a cohesive document of this nature.
Of note, the Code does not impose any legally binding or regulatory obligations on market participants.
Nor does this initiative substitute for existing regulatory measures in any jurisdiction. Instead, the Code serves as a supplementary means to any and all local laws, rules, and regulations.
In this sense, the Code helps traverse any borders, helping identify optimized good practices and processes in the FX space.
The Code was originally met with strong support from a wide range of industry players. This includes both retail and institutional market participants.
In order to foster transparency and adherence to the Code, a public register has since been established.
In doing so, central banks can post their Statements of Commitment to the Code.