MAS Takes Stock of FX Global Code, One Year Since Launch

MAS deputy managing director Jacqueline Loh spoke about the steps taken in adopting and embedding the FX Global Code in the industry and key priorities for the coming year.

MAS (Monetary Authority of Singapore) deputy managing director Jacqueline Loh recently spoke about FX market developments at the 14th FX Week Asia Conference in Singapore, marking one year since the launch of the FX Global Code.

The Code was launched last year as a collaborative effort between central banks and key foreign exchange participants. It lays out good practices in the FX market applicable to wholesale market participants, trading platforms and other market infrastructures.

The Code is owned and maintained by the local Foreign Exchange Committees through the GFXC (Global Foreign Exchange Committee). In Singapore, the SFEMC (Singapore Foreign Exchange Market Committee) has taken on the responsibility to promote and encourage adherence to the Code.

Since its launch, Low said that a significant number of global market participants have demonstrated adherence to the Code with many central banks, including the MAS, issuing statements in support of the Code on their websites.

There has also been progress in integrating aspects of the Code into the FX market. Low said that the adherence with the Code has prompted internal reviews within many firms where market participants have considered how the Code could apply to their businesses.

Adherence to the Code has also enhanced client disclosure among participants to provide greater transparency and incorporate the principles within the Code.

Further Loh said that the Code was prompting discussions on issues relating to the FX market: “ This is a good outcome where emerging issues are identified, debated and addressed within the Code. And this is an important element to keep the Code relevant over time.”

Over the past year, for example, the GFXC has consulted on principle 17 of the Code on “last look” following which the Code was updated based on market feedback.

Going forward, Loh said that the GFXC will step up outreach efforts to the buy side and look to boost participation from that part of the industry by clearly articulating the benefits of adherence with the Code.

The MAS will continue working on issues arising in the consultation on principle 17 and strengthen FX disclosures. It will also continue to embed and integrate the Code into the FX market, Loh added.

Loh also spoke about key priorities in the coming year to cement Singapore’s position as an important e-trading hub for FX including leveraging global and regional opportunities, embracing technology and expanding programmes for skill upgradation.

“I am confident that the Code will further strengthen the integrity and vibrancy of our FX market. This will complement our co-creation efforts with industry players, like yourselves, to grow the FX market further. These initiatives are set out in the Financial Services Industry Transformation Map (or ITM), a roadmap that paints Singapore’s vision as a leading global financial centre in Asia in 2020,” she added.

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