ACI updates Model Code

ACI, the global trade association for wholesale financial markets, has launched an updated version of its Model Code and an online portal to offer new guidance on ethics and conduct for fixed income, commodities and currencies markets.

In reiterating the need for the enforcement of an international code of conduct, the ACI said the Model Code provides "exactly" what central bank FX committees called for earlier this month: clear and well-documented policies and procedures for trading.

On March 12, the Global FX Committee, comprising the FX committees of the major central banks, agreed to create a new global framework for conduct, which will sit above the existing codes they have endorsed individually.

"FX market participants should consider, as appropriate, adopting a process by which relevant managers periodically attest to the supervision of their staff with respect to compliance with the FX policies," the statement said.

"[Our Model Code] is further reinforced by the key messages from the global central bank FX committees from Tokyo this week, as the FX committees are calling for exactly what ACI provides: market participants must have well-documented policies and procedures in place, and sufficient systems and controls to protect FX trading information within the dealing environment, and other areas of the market where participants may obtain such information," the ACI said in its press release.

There is a clear and urgent need to reform the culture and conduct of the financial services sector

The updated ACI code includes guidance on last look practices, high-frequency trading, aggregation, rate setting, FX dark pools and best practice in times of extreme market volatility. The ACI also launched a new e-learning annual certification (ELAC) portal, which enables banks to reduce their conduct risk and align themselves with the global regulatory environment.

ELAC facilitates easier teaching and testing of the Model Code, and allows individuals and their employers to learn, test and monitor their understanding of it. It also helps to embed a strong culture of individual accountability, and reinforce the right message across divisions and staff.

"Regulators are rightly stepping up efforts to tackle trader misbehaviour and place ethics at the heart of their market reforms. There is a clear and urgent need to reform the culture and conduct of the financial services sector, and the ACI's Model Code and ELAC portal sets the benchmark for industry best practice across fixed income, currencies and commodities in order to achieve this," says ACI president Marshall Bailey.