The FXWG aims to help develop a common set of guidelines in the improve liquidity, infrastructure and transparency in the global FX markets. The global code of conduct is being developed with various central banks and market participants from 16 jurisdictions worldwide, including Mizuho Bank, Barclays, BNP Paribas, Citi and the Reserve Bank of Australia. The first phase of the code was published on 26 May, and the complete code and the adherence mechanisms will be released in May 2017. The first phase outlines principles for ethics, trade execution, information sharing, confirmation and settlement.
"In a globalised world, the foreign exchange market is one of the most vital parts of the financial plumbing. One of the guiding principles underpinning our work is that the Code should promote a robust, fair, liquid, open, and transparent market," said FXWG chairman Guy Debelle, who is the Assistant Governor of the Reserve Bank of Australia.
The global code of conduct is not legally binding, and market participants are not obliged to comply with it. The FXWG said on 26 May that the code is aimed to serve as a "supplement to any and all local laws, rules, and regulation by identifying global good practices and processes".
The FXWG was established by the BIS in 2015 and perates under the auspices of the Markets Committee, a forum for senior central bank officials to jointly monitor developments in financial markets and assess their implications for the market operations of central banks. The FXWG has numerous financial institutions as members. David Puth, head of the Market Participants Group and Chief Executive Officer of CLS said: "This has been a unique opportunity for key participants in the FX industry to work together to develop a code of conduct that will have far-reaching implications across the market."