The FX Global Code was published on 25 May 2017.
The Code provides a common set of globally recognized principles of good practice in the foreign exchange market designed to promote the integrity, transparency and liquidity of the wholesale foreign exchange market and to foster the harmonization of good practices at global level.
The Code was developed at the request of the Bank for International Settlements and is the result of a partnership between central banks and the private sector. It does not impose legal or regulatory obligations but rather a general set of guidelines, and it should serve as a supplement to existing local practices and regulations, aligning standards and conduct rules globally.
The Code covers areas of major importance for the FX market, such as ethics, governance, order execution, information sharing, risk management and compliance, confirmation and settlement.
Its success in the market and its effectiveness in achieving its objectives will depend on the degree of voluntary adherence by market participants. For this reason, a blueprint for achieving widespread adoption of the Code has been developed (the 'Report on Adherence'), which requires both central banks and market participants to play an important role. Central banks in particular are called to lead by example by adopting the Code and to raise awareness among other market participants.
A Statement of Commitment was published alongside the Code, allowing market participants to voluntarily signal their commitment to adhere to the principles of the Code. Market participants may use the Statement publicly by publishing it on their website or in the 'public registers' currently being created.
On 29 November 2017, Banca d'Italia, along with 14 of the ESCB central banks including the ECB, publicly undertook to support and comply with the Code by signing the Statement of Commitment. Following a harmonized approach, the remaining ESCB central banks are aligning their internal practices with the principles of the Code. The whole process will be completed with the publication of Statements of Commitment by May 2018 at the latest.
The ESCB is also continuing the exercise to promote adherence to the Code with industry associations and their regular FX trading counterparties.