FX Global Code

 

FX Global Code summary:

• The FX Global Code is a set of international best practice principles designed to enhance the integrity and functioning of the wholesale FX market, developed collaboratively by central banks and market participants worldwide.
• The FX Global Code emphasises key principles including ethics, transparency in the FX market, governance, risk management, and compliance.

 

FX Global Code of Conduct explained

• What is the FX Global code?
• What is the purpose of the FX Global Code?
• Who was the FX Global Code developed by?
• What are the six leading principles of the Global FX Code?
• FX Global Code signatories
• MillTech and the FX Global Code

 

What is the FX Global Code?          

The FX Global Code of Conduct is a set of international principles for best practices in the foreign exchange market, aimed at establishing unified guidelines to enhance integrity and functioning. Developed collaboratively by central banks and market participants worldwide, it serves as a common reference point.

Focusing on principles like ethics, transparency, governance, risk management, and compliance, the FX Global Code also addresses specific issues such as execution, confirmation practices, prime brokerage relationships, and electronic trading.

One of its key objectives is to promote fair and effective competition, fostering an environment where participants can compete on a level playing field with clear, transparent rules. The Code further encourages high ethical standards in interactions.

The FX Global Code allows asset managers and corporations to evaluate FX liquidity providers and partners against best practices, ensuring best execution and forex transparency.

 

What is the purpose of the FX Global Code?

The updated 2024 FX Global code states:

“It is intended to promote a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of Market Participants, supported by resilient infrastructure, are able to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour.”

The FX Global Code of Conduct does not enforce legal or regulatory requirements for market participants, nor does it replace existing regulations. Instead, it is designed to complement local laws, rules, and regulations by highlighting global best practices and processes.

 

Who was the FX global code developed by?

The FX Global Code was implemented by the Foreign Exchange Working Group, which includes central banks from 16 jurisdictions worldwide. Millennium Global played a key role in the development of the FX Global Code and was represented on the Bank of England's Foreign Exchange Joint Standing Committee for many years.

The original version of the FX Global Code was released on 25 May 2017. The FX Global Code is overseen by the Global Foreign Exchange Committee (GFXC), which conducts a review every three years to ensure its ongoing relevance and effectiveness. The most recent update was made in December 2024.

 

What are the six leading principles of the Global FX Code?

• Ethics: Promoting fairness and integrity in the FX market.
• Governance: Establishing a robust governance framework to ensure clear accountability and thorough oversight of FX market activities.
• Execution: Acting diligently when negotiating and executing transactions.
• Communication: Communicating clearly and accurately while safeguarding confidential information.
• Risk Management and Compliance: Fostering and upholding strong compliance for risk identification and mitigation.
• Confirmation and Settlement Processes: Implementing risk-mitigating processes post-trade to promote ease of settlement.

 

FX Global Code signatories

Over 1.3K market participants have signed the FX Global Code of Conduct, according to the GFXC’s public register.

 

MillTech and the FX Global Code

Millennium Global has signed a statement of commitment to the FX Global Code and is dedicated to implementing best market practices.

At MillTech we have integrated various measures and practices into our daily operations to ensure we uphold the principles outlined in the Global FX Code.

A key component of this is ongoing training and education for our employees. At MillTech, all employees undergo regular training on market best practices and ethical conduct. This includes specific training on the FX Global Code and how it applies to our business.

Additionally, we have implemented robust internal controls and FX risk management procedures to monitor compliance with the Code. These procedures are routinely reviewed and updated to ensure they remain aligned with any revisions or updates to the Code.

Check out our blog to learn more about the FX Global Code.