should conduct an urgent investigation on the role of management and staff in dealing with agents, to ensure that there had been compliance with australian laws. these suggestions and some other proposed drafting changes were accepted. mr battellino also asked that the npa manager, who had played a key role in preparing the may 2007 npa board paper, had assisted the audit, and who had voiced concerns to mr campbell in april, be requested to come to the reserve bank ’ s head office in sydney and to put any concerns he had directly to the bank, and to do so in writing. the npa manager agreed to do so, but only on the condition that his visit be kept strictly confidential and having been assured that his statement would be read only by a very small number of people – the deputy governor and perhaps the governor. ( it was not provided to the governor. ) the meeting between the npa manager and the deputy governor took place on 5 june, the same day as the draft audit report became available. at the request of the deputy governor, on 8 june the npa manager supplied a written statement through his lawyer to the reserve bank ’ s legal counsel on strict terms of confidentiality required by him. the deputy governor read it. the same document with some very minor changes was, at the bank ’ s request, subsequently provided by the npa manager ’ s lawyer directly to the freehills team who were engaged by the npa board sub - committee, also on terms of strict confidentiality and on the basis that it would be returned to the npa manager ’ s lawyer which it was. on 7 june 2007 the reserve bank senior management discussed the draft audit report with mr thompson. it was agreed that the draft audit report contained serious findings and that the npa board needed to meet and put in place a detailed response to the matters raised. it was agreed that, in line with the audit recommendations, the npa board should establish a sub - committee to investigate npa management and staff in their dealings with agents. it was also agreed that a similar audit of the use of agents by securency should be requested, pending which payments to securency ’ s agents would be suspended. the final npa audit report, which contained the strengthened recommendations, was provided to the npa board on 8 june 2007. on that day, mr battellino sent to the reserve bank audit committee a copy of the audit report, as well as a copy of a file note of the meeting with

that our counterparties sign the statement of commitment, just as we will ourselves. given that we provided the full text of the code to the market only last month, there will be a period of time for market participants to adjust their practices where necessary to be in line with the principles in the code. i would not expect much time should be required to do this. this period of time might potentially be as short as six months, but no more than twelve months for the vast majority of market participants. how much effort this might require will in part depend on the nature and extent of engagement with the fx market. in drafting the code, we have always kept the principle of proportionality at front of mind. finally, it is vital that the code remains up to date and evolves as the market evolves. the code will be collectively owned, maintained and updated by the global foreign exchange committee ( gfxc ), which met for the first time in london in may. this will continue the public sector – private sector partnership which has supported the development of the code. the gfxc will regularly assess whether new information or market developments warrant updates or additions being made to the code. as the first example of this, given diversity of views on the use of last look in the market, the gfxc is currently requesting feedback on trading in the 3 / 4 bis central bankers'speeches last look window. 7 on a less frequent basis, the gfxc will oversee a more comprehensive review of the code. conclusion the global code is the culmination of two years of work by a group of people from both the private and public sectors. the work reflected a very constructive and cooperative effort between the central banks and market participants. we all undertook this work in addition to our regular responsibilities, at all hours of the day and night. this contribution of time and effort reflected the fact that all of us recognise the need to restore the public ’ s faith in the foreign exchange market. we share the view that the global code plays an important role in assisting that process and also in helping improve market functioning and confidence in the market. 1 an app version has also been made available by an external party : app. policystore. ch / c / fxcode /. 2 see < www. bis. org / press / p150511. htm >. 3 www. globalfxc. org / adopting _ the _ global _ code. htm 4