Automated Surveillance Key to FX Global Code Conformity
b-next, a specialist provider of capital markets compliance solutions, has published a new technology paper explaining how adherence to the Bank for International Settlements (BIS) FX Global Code can be streamlined via the deployment of advanced automated surveillance and trading platforms.
The paper titled “Adhering to the FX Global Code of conduct” was produced in collaboration with ACI Americas and Thomson Reuters. It recognises that smaller institutions engaging in FX activities, face a challenge to ensure they can meet some of the Code’s certification requirements. The paper identifies three leading principles within the Code where advanced technology can help. It highlights how the adoption of sophisticated automated surveillance tools and trading platforms can offer market participants a practical and cost effective means of meeting the requirements of the Code. This applies particularly to the principles relating to specific areas of execution, risk management and compliance, as well as trade confirmation and settlement.
Commenting on the role and benefits of automated surveillance, Wolfgang Fabisch, CEO b-next, said, “Surveillance is a complex, large and dynamic task, it’s therefore ideally suited to automation. Database technology is the key to successful, cost effective outcomes. Advanced automated tools offer in-memory techniques for ultra-fast data processing. They also include intelligent, highly flexible rules with intuitive parameter controls that skilled domain experts can use without in-depth IT knowledge. The net result for market participants will be a reduction in workloads and costs when adhering to the Code. As the code gains further acceptance, we believe the case for adopting proven technologies will become increasingly compelling.”
Jack Drohan III, President, ACI America commented, “I welcome this paper, which explores how automated surveillance tools and advanced trading platforms from b-next and Thomson Reuters can help market participants to prepare and adhere to the requirements of the FX Global Code.”
Commenting on trading platform conformity with the principles of the Code, Neill Penney, managing director and co-head of Trading at Thomson Reuters said, “Thomson Reuters is committed to upholding fair and efficient FX markets and helping our customers adhere to the requirements of the Global Code of Conduct. Thomson Reuters Deal Tracker allows front, middle and back office users at banks – as well as relevant Compliance departments – to monitor Thomson Reuters Dealing conversations in real time. It also allows monitoring of trades from Matching, FXall and external venues through Thomson Reuters Trade Notification. This helps to support good practice for responsible participation in the wholesale foreign exchange market.”
The paper can is available now for free download here
Algorithms have become more prevalent in the spot FX market.
Global Foreign Exchange Committee has made recommendations on Last Look.
There is a growing demand for transparency in FX trading by regulators.
CLS has also enhanced its existing suite of alternative FX data products.
FX Global Code sets out good practice for last look and provides illustrative examples.