What is the Code of Conduct for the Forex Market and what are its objectives?
The FX Global Code is a set of 55 global principles of sound professional practice in the foreign exchange (forex) market. The Global Forex Code has 55 principles, all of which aim to adopt a common set of guidelines developed with the purpose of promoting the integrity and effective functioning of the institutional forex market.
The latest version of the Code of Conduct for the Forex Market was released in July 2021 and can be downloaded from the Global Foreign Exchange Committee website.
Creating a Code of Conduct for the Forex Market: Who, When, and Why?
The first full version of the Code of Conduct was released by the Foreign Exchange Working Group (FXWG) on May 25, 2017. The International Forex Market Working Group was established in July 2015 with the support of the Bank for International Settlements and is composed of central banks in 16 geographic regions around the world. The Global Foreign Exchange Committee (GFXC) — currently monitors adherence to and updates the Code. This group was established in May 2017 and it includes a group of central banks and market participants from the private sector with the purpose of promoting the concepts of trust, liquidity, openness and transparency in the forex market.
What are the basic principles of the Code of Conduct for the Forex market?
The Code of Ethics includes 55 principles in total, but focuses on six key principles: ethics, governance, enforcement, information sharing, compliance and risk management, settlement and assurance processes.
Who does the Forex Market Code of Conduct apply to?
The Code of Conduct for the Forex Market applies to all participants in the foreign exchange market, including buy-side and sell-side entities, non-bank liquidity providers, operators of electronic forex trading platforms and other entities providing brokerage, execution and transaction settlement services.
Is there any entity that enforces the Code of Conduct for the forex market?
The Forex Code of Conduct is completely voluntary, but subscribing to the Code may be a requirement for membership in some Forex authorities, and some central banks may require their counterparties in transactions to sign it. The Code of Conduct is intended to serve as a complement to local laws, rules and regulations, but it is not intended to impose legal or regulatory obligations on participants in the forex market, nor is it a substitute for government regulation. Signing this Statement of Commitment does not create any legal obligations for the signing institution, including reporting obligations to GFXC, other than those dictated by the laws, rules and regulations applicable to it and the requirements of operating in the forex market in each jurisdiction in which it operates.
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