FX Global Code
The FX Global Code is a set of global principles of good practice in the foreign exchange (FX) market, developed to provide common guidelines that promote the integrity and effective functioning of the wholesale FX market.
The Code is comprised of 55 principles that promote a robust, fair, liquid, open, and appropriately transparent market. It aims to promote a 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 behavior.
The principles cover ethics, governance, execution, information sharing, risk management and compliance, and confirmation and settlement processes. The Global Code does not impose legal or regulatory obligations on market participants, nor does it substitute for regulation. Instead, it is intended to supplement any and all local laws, rules, and regulations.
First published in 2017, the FX Global Code was created through a public-private sector collaboration across central banks and market participants. It is a living document and recently underwent a comprehensive review in 2021.
Market participants demonstrate their commitment to the Code and good practices by publishing a signed statement of commitment. As detailed in the FXC’s charter, the New York Fed expects FXC member firms to demonstrate their commitment to the FX Global Code by providing it with a Statement of Commitment.
Why Commit to the FX Global Code
The FX market is the largest financial market in the world and helps to facilitate the flow of capital in support of international trade and investments. Its integrity is important for maintaining the public’s trust in the financial system. Therefore, every market participant, regardless of its size and complexity, has an interest and a role in contributing to a fair and effective market.
For the diverse market participants that transact in the FX market, the Code provides an international benchmark against which they can assess not only their own internal practices, but also those of their FX counterparties, platforms, and vendors. It improves the quality of pricing and execution in the market and fosters a level playing field between buy-side and sell-side participants. It also signals to internal and external stakeholders that an institution is an informed, responsible, and competent market participant.
How to Commit to the FX Global Code
The FX Global Code and the Statement of Commitment take into account the diversity of market participants’ sizes, the complexity of their FX market activities, and the nature of their engagement with the FX market. Each market participant should conduct an internal assessment to determine what considerations and actions are necessary and sufficient to adopt and adhere to the Code.
To do that, the Global Foreign Exchange Committee created the FX Global Code Proportionality Self-Assessment Tool. Using this tool, market participants can answer questions about their activity in the FX market to download a report that highlights the principles that apply to them.
Additional resources to aid markets participants in committing to the Code include:
- Frequently Asked Questions: 38 questions about the Code and how to align with it.
- Roadmap to Adherence: 10 steps firms should consider to align their institutions’ practices with the Code.
FX Global Code: Current version as of July 2021.
An Introduction to the FX Global Code: Education slides by the Global Foreign Exchange Committee.
Frequently Asked Questions: 38 questions about the Code and how to align with it.
Roadmap to Adherence: 10 steps firms should consider to align their institutions’ practices with the Code.
FX Global Code Proportionality Self-Assessment Tool: Identifies the 55 principles of the Code in proportion to a market participant’s role in the FX market.
Global Index of Public Registers: Search market participants’ statements of commitment to the Code.
Contributing to a Fair and Transparent FX Market: New York Fed Markets leaders on the value of the Code.