guy debelle : the global code of conduct for the foreign exchange market speech by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, at the fx week asia conference, singapore, 31 august 2016. * * * thank you for having me here today to talk about the global code of conduct for the foreign exchange market. as you may know, phase 1 of the code was launched in new york in late may. 1 today i will reiterate the motivation for the work we are doing on the global code, then update you on where we are at with the process and outline the way forward. why is the work going on? as i have stated on previous occasions, the foreign exchange ( fx ) industry is suffering from a lack of trust in its functioning. this lack of trust is evident both between participants in the market, but at least as importantly, between the public and the market. the market needs to move toward a more favourable and desirable location, and allow participants to have much greater confidence that the market is functioning appropriately. a well - functioning foreign exchange market is very much in the interest of all market participants. this clearly includes central banks, both in their own role as market participants but also as the exchange rate is an important channel of monetary policy transmission. in a globalised world, the foreign exchange market is one of the most vital parts of the financial plumbing. the global code sets out global principles of good practice in the foreign exchange market to provide a common set of guidance to the market, including in areas where there is a degree of uncertainty about what sort of practices are acceptable, and what are not. this should help to restore confidence and promote the effective functioning of the wholesale fx market. to that end, one of the guiding principles underpinning our work is that the code should promote a robust, fair, liquid, open, and transparent market. a diverse set of buyers and sellers, supported by resilient infrastructure, should be able to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour. the work to develop the global code commenced in may last year, when the bank for international settlements ( bis ) governors commissioned a working group of the markets committee of the bis to facilitate the establishment of a single global code of conduct for the wholesale fx market and to come up with mechanisms to promote greater adherence to the code. 2 there are two important points worth highlighting :

first, it ’ s a single code for the whole industry and second, it ’ s a global code. it ’ s covering all of the wholesale fx industry. this is not a code of conduct for just the sell side. it is there for the sell side, the buy side, non - bank participants and the platforms ; its breadth is both across the globe and across the whole structure of the industry. the code is intended to apply to all aspects of the wholesale foreign exchange market. i am chairing this work, with simon potter of the federal reserve bank of new york leading the work on developing the code and chris salmon of the bank of england leading the http : / / www. bis. org / mktc / fxwg / gc _ may16. pdf. http : / / www. bis. org / press / p150511. htm. bis central bankers ’ speeches adherence work. our working group comprises representatives of the central banks of all the major fx centres, drawing on the membership of the markets committee which is comprised of heads of the market operations areas of the 15 major currency areas. 3 given our roles, we are all very much interested in the effective functioning of the fx market. again, it is very much a global effort reflecting the global nature of the foreign exchange market. this work is also very much a public sector – private sector partnership. in that regard, we are being ably and vigorously supported in this work by a group of market participants, chaired by david puth, ceo of cls. the group contains people from all around the world on the buy side, including corporates and asset managers, and the sell side, along with trading platforms, ecns and non - bank participants, drawing from the various foreign exchange committees ( fxcs ) and beyond. there are a number of members of david ’ s group which are from asia, including singapore. hence all parts of the market are being involved in the drafting of the code to make sure all perspectives are heard and appropriately reflected. at the outset we decided to split the topics we intend to cover in the code into two parts. this first phase covers areas such as ethics, information sharing, aspects of execution and confirmation and settlement. the second phase will cover further aspects of execution including e - trading and platforms, prime brokerage, as well as governance, and risk management and compliance. we have made substantial progress in drafting the second phase. it will be circulated for comment to