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Six Years On: Ensuring the FX Global Code Remains Relevant

Eric Huttman, MillTech FX

the Code's future depends on its ability to appeal to buy-side firms and corporates.

By Eric Huttman, CEO of MillTechFX

The FX Global Code was introduced six years ago. This article discusses developments in the past year and what the GFXC needs to consider to ensure the FX Global Code remains relevant for years to come.

Eric Huttman

The BIS Foreign Exchange Working Group published the FX Global Code of Conduct on 25 May 2017 with the aim of providing a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange (FX) market.

It is a set of global principles of good practice in the FX market, covering ethics, governance, execution, information sharing, risk management and compliance as well as confirmation and settlement.

The FX Global Code has improved practices across the industry while promoting transparency and spurring debate in key areas such as transaction cost analysis. 

But a lot has changed in the past six years and if it’s to remain relevant, it’s important the FX Global Code is a living code of conduct that continues to adapt to this everchanging market.

FX Global Code adoption

The FX Global Code was published with the aim of promoting integrity and setting out best practice across the wholesale FX market. 

The code is voluntary, and out of the 1,150+ signatories which have registered, there are currently only 84 asset managers, 30 corporates and 15 pension funds according to the GFXC’s public register

Convincing end users in the FX market to sign up to the code has always been an issue but the GFXC has been working to further strengthen FX Global Code adherence. 

To support market participants with less complex FX activities, in December 2022, GFXC members agreed to commission a Digital Proportionality Tool for facilitating FX Global Code adherence.

The GFXC Chair Andréa M. Maechler expressed her expectation that this mechanism will give new impetus to the promotion of the Code: “I am convinced that the Digital Proportionality Tool will attract more new signatories to the Code, especially from the still underrepresented buy-side community.”

Looking ahead, it’s vital that we heighten awareness of the code among buy-side firms and corporates as it enables them to scrutinise their liquidity providers and partners’ processes against best practice, leading to a fairer and more transparent FX market.


Slowly but surely ESG is filtering into FX. According to MillTechFX’s own 2022 fund manager FX survey, 58% of fund managers said that their FX counterparties must have strong ESG credentials while 36% said that it was an important consideration.

A lot of the focus has however, been on the first two letters of the acronym – ‘E’ (environmental) and ‘S’ (social), while the ‘G’ (governance) may often be seen as the less important of the three letters. 

Strong governance in areas such as regulatory compliance, transparency and implementation of industry best practices must form a central element of any business seeking to be a good corporate citizen.

The GFXC has moved to embed the FX Global Code in firms’ ESG practices. Its members supported the possibility of a partnership with rating agencies so that anyone who signs the code can be recognised as having fulfilled the governance element of their ESG commitments

Stefanie Holtze-Jen said: "Creating tangible benefits and lowering barriers to adherence for the buy side are key for further anchoring the Code in the FX market."

If made by the GFXC, this move would be a great way to enable ‘G’ to catch up with ‘E’ and ‘S’ which remain well ahead.

The future of the FX Global Code

The FX Global Code has largely been adopted and driven by the sell-side. Banks have agreed upon standard practices and helped drive out controversial practices such as last look.

But its future relies upon its ability to appeal to other important parts of the market. Many buy-side firms and corporates don’t even know of its existence and it’s vital the GFXC works to raise awareness and adoption among this core segment.

We need more initiatives like the Digital Proportionality Tool and potential link ups with the ESG rating agencies to continue to drive the FX Global Code forward and ensure it’s relevant for years to come.


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