FXPA Cautions Over Prescriptive Nature of Proposed Amendments to FX Global Code

WASHINGTON, DC, October 28, 2024 – The Foreign Exchange Professionals Association (FXPA) cautions that proposed amendments to the FX Global Code and Disclosure Cover Sheets may be overly prescriptive.

In the feedback provided to the Global Foreign Exchange Committee (GFXC), FXPA reaffirms its commitment to the Code, which aims to foster a robust, fair, liquid, open, and transparent foreign exchange market, and commends the GFXC’s efforts to enhance transparency and stability within the FX market through these updates.

“We believe that aligning with the Code’s principles-based approach is crucial for benefiting all market participants,” FXPA states in comments submitted to GFXC today.

However, the FXPA cautions that an overly rigid framework could hinder widespread adoption of the Code, as it might not provide the necessary flexibility to accommodate varying jurisdictional regulatory requirements and promote responsible innovation and efficiency.

To ensure the amendments are effective, the FXPA suggests that they be accompanied by enhanced explanations, guidance and, where appropriate, cost-benefit analyses. FXPA believes this is essential for evaluating the potential market impacts of the proposed changes.

FXPA also notes that the public consultation period was notably short, making it challenging for market participants – who often operate across multiple jurisdictions – to adequately assess the proposed amendments, and urges GFXC to allow sufficient time and engagement for validating the feasibility and desirability of these changes with the broader market.

Furthermore, the FXPA encourages the GFXC to ensure that all market participants, including trading platforms and infrastructure providers, are represented throughout the amendment process. “It is vital to engage end-users and buy-side representatives to foster a constructive dialogue that encourages their commitment to the Code and to ensure that any adopted amendments deliver meaningful benefits,” FXPA states.

The FXPA’s membership, including its buy-side and platforms working groups, stands ready to collaborate with the GFXC to ensure the Code remains fit for purpose and enhances the integrity of the FX market.

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About FXPA: The Foreign Exchange Professionals Association (FXPA) is dedicated to promoting a fair and efficient foreign exchange market through collaboration among market participants, regulators, and industry stakeholders.