BIS commits to FX Global Code

The Bank for International Settlements announced on May 9 that it has taken steps to align its activities with the 55 principles contained in the FX Global Code of Conduct, which was published on May 25, 2017. 

The BIS says it has reviewed the document’s content and acknowledges the Code represents a set of principles that is generally recognised as good practice in the FX market.

“The institution confirms it acts as a market participant as defined by the Code and is committed to conducting its FX market activities in a manner consistent with the principles of the Code,” reads a statement from the BIS.

The BIS is owned by 60 central banks, representing countries that account for 95% of the world’s gross domestic product. It acts as a prime counterparty for central banks in their financial transactions.

“To this end, the institution has taken appropriate steps – based on the size and complexity of its activities, and the nature of its engagement in the FX market – to align its activities with the principles of the Code,” the BIS says. 

Central banks have encouraged market participants to commit to the set of voluntary principles by the first anniversary of the Code’s release or face losing their counterparty status with central banks. So far, more than 100 participants have signed statements of commitment, attesting their systems are compliant.

Daily FX trading volumes fell 5.5% to $5.1 trillion in April 2016, according to the latest figures from the BIS’s triennial survey. This was driven by a 15% drop in daily spot transactions, to $1.7 trillion from $2 trillion three years ago.