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Eight international FX Committees agree harmonised code of conduct

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Marshall Bailey, President, ACI – Financial Markets Association, comments on the agreement by eight international FX committees on a harmonised set of principles and guidelines to govern conduct and behaviour in FX trading and strengthen oversight…

The ACI welcomes the announcement from eight international FX Committees that they have adopted the same set of rules and principles for their respective regions. Harmonised reform and strengthening oversight of the FX industry is crucial if we are to restore the reputation of the market, and the ACI has long argued for the need for a set of rules that apply globally in order to achieve this. The revised Global Preamble is a major step towards achieving this goal.
 
Importantly for market participants and members of the ACI, the harmonised principles and rules will ensure there is no scope for ethical arbitrage. Different regions applying their own codes of conduct could have unintended consequences and drive trading to less-stringent regulatory jurisdictions, and we are pleased that this scenario has been avoided in the major financial centres. Harmonisation is also beneficial for regulators, as they can measure the behaviour, ethics and conduct of all participants by the same criteria – regardless of geographical location – and any misdemeanours can be immediately identified and addressed.
 
The Global Preamble touches on many of the issues addressed by the ACI in its updated Model Code for 2015. A central component of the agreed rules and the ACI’s Model Code is ensuring that individuals are educated about the appropriate ethical standards and behaviour expected of them by their employers and the market, and the consequences for them as individuals if they choose to engage in illegal or unethical behaviour. 
 
A universal code of conduct, with comprehensive guidelines and best practices will help in providing a moral compass and guidance to which all professionals can adhere. The Model Code has been the market gold standard for ethical behaviour for decades, but testing and measuring knowledge of the Code is also critical. The ACI’s new e-learning and certification (ELAC) Portal has already embedded the wording from the Global Preamble, making it as up-to-date as possible, and will allow members to test their knowledge of the Model Code and benefit from interactive scenarios to demonstrate how the conduct rules can be applied in a variety of situations. Measuring and monitoring progress is central to behavioural change and the ELAC Portal is designed to ensure any knowledge or conduct gaps are swiftly addressed by supervisors

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