Principles for more secure and transparent foreign-exchange trading were introduced Thursday by the Bank for International Settlements.
The six principles are the first phase of an effort from BIS, which comprises 60 central banks, to create a global code of conduct for FX trading following several high-profile cases of foreign-exchange manipulation.
The principles for FX market participants, listed on BIS’ website, concern:
- ethical behavior;
- the establishment of governance policies by participants;
- guidelines on sharing and protection of confidential information;
- cautious trade execution;
- risk management and compliance; and
- robust post-trade verification processes.
The code is being developed by a working group of central banks and a committee of market participants. It will not impose regulatory obligations on market participants but is intended to supplement existing regulations and laws.
“One of the guiding principles underpinning our work is that the code should promote a robust, fair, liquid, open and transparent market,” said Guy Debelle, assistant governor of the Reserve Bank of Australia and chairman of the FX working group.
The complete code is scheduled to be released in May 2017.
