02.06.2020

IA Calls For Standardisation Of Failed FX Trades

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.

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

Related articles

  1. The Universities Superannuation Scheme is the UK’s largest private pension scheme.

  2. Daily Email Feature

    Traders Seek Desktop Harmony 

    Buy-side and sell-side firms need to integrate applications to streamline traders' UX.

  3. ETF Issuers Welcome Deutsche Börse Initiative

    Passive funds represented nearly all U.S. equity inflows.

  4. J.P. Morgan is hiring senior bankers and traders as other firms cut

    President and chief executive officer of State Street Global Advisors will retire in 2022.

  5. The majority of US ETF issuers are either developing or planning to develop transparent active ETFs.