New standardised categories to simplify the processing of unsuccessful trades on the foreign exchange (FX) markets have been proposed by the Investment Association (IA), in a bid to bring greater consistency to the market and improve outcomes for investors.
Today we launched new standardised categories to simplify the processing of unsuccessful trades on the foreign exchange markets and make trading more efficient.
Check out our proposals here: https://t.co/odxxIQ6ckn pic.twitter.com/EbyXiPGyuM
— The Investment Association (@InvAssoc) February 5, 2020
Under the proposals, when a request by an investment manager to trade on the FX markets is not executed, the brokers, dealers and platforms (‘execution providers’) will be asked to use 13 new high-level reject code categories to organise their current use of reject codes: a shorthand identifier explaining why a trade has not been executed. The proposed high-level categories will allow information on why a trade was unsuccessful to be communicated quickly and consistently, allowing for faster processing by investment managers. The cause of the rejection can then be remedied quicker, to minimise any disadvantage to investors.
The IA is asking all execution providers to match up their existing reject codes to the 13 new high-level reject code categories and report to their investment management clients by the end of Q1 2020, while recognising that some execution providers may wish to distinguish their level of service by continuing to provide additional tailored reject codes.
Galina Dimitrova, Director for Investment and Capital Markets at the Investment Association, said:
“When it comes to deciding whether, how and where to trade on the FX markets, investment managers must seek to act in the best interests of their clients.
“Currently brokers on the FX markets have no consistent way to communicate why trades aren’t successful. Our new reject code categories help ensure the reasons for trade rejections can be analysed rapidly, so steps can be taken to put right any errors and minimise potential disadvantage to savers and investors.”
Source: IA
NEWSLETTER SIGN UP
And receive exclusive articles on securities markets
As Technology Evolves, Asset Managers Adapt and Innovate
Citi Changes Organizational Structure
SEC Charges Virtu for Disclosures Relating to Information Barriers
ICE Futures Singapore Partners with CoinDesk Indices
Related articles
-
Year-to-date net inflows are the second highest on record.
-
Fund managers should need strong justification if more than two business days are needed to settle trades.
-
This adds $11bn in hedge funds, private credit & commodities to the asset management platform.
-
They will roll out a comprehensive, end-to-end order & processing solution for retail & institutional funds.
-
The client base has increased by nearly 17% from year-end 2023 to the end of the first quarter of 2025.