of many market participants, and this varies significantly across jurisdictions. this variation, coupled with the diverse nature of fx markets globally, means that a ‘ one size fits all ’ approach to adherence would not be appropriate. the final framework for adherence will need to strike the right balance between respecting the existing diversity across different markets, and maintaining consistency with regard to what is a global initiative. in that regard, we have articulated three principles which underpin our overall approach to adherence. • universal : the global code should apply to all wholesale fx market participants, based on the activities they undertake and subject to compliance with any applicable regulations. we have been working hard to incorporate the perspective of all types of wholesale fx market participants into the draft code, and we want it to be widely applicable across the market. • proportionate : how wholesale fx market participants adhere, and demonstrate their adherence, to the global code should be proportionate and appropriate to the type of participant and the context of the local financial markets. • transparent : the mode of adherence should be transparent, to enable monitoring and market discipline. it is worth stressing that the “ proportionate ” principle is not designed to lower the bar – it is designed to reflect the differences in the type and volume of market activities of certain market participants and the variation in fx markets worldwide. the concrete details of the adherence mechanisms remain a work in process. we will have more to say on this in new york in may. at this stage, our thinking is that there is unlikely to be a single adherence mechanism but rather a suite of mechanisms. conclusion that, i trust, gives you a reasonable overview of the state of play on the global code. a lot of work has been done to get us to this point. there is still a lot of work to be done. the work to date has reflected a very constructive and cooperative effort between the central banks and market participants. all of us recognise the need to restore the public's faith in the foreign exchange market and the value of the global code in assisting that process and also in helping improve market functioning and confidence in how the market functions. i expect that cooperative relationship will continue as we see this process through to its conclusion in may next year. bis central bankers ’ speeches

in particular jurisdictions, but rather in terms of common market parlance. bis central bankers ’ speeches articulating these principles is to provide market participants with the framework in which to think about how they handle stop - loss orders. the emphasis here is very much on the word ‘ think ’. the global code will not provide the answers to all your questions, but it should help you ask the right questions. in a similar vein, i will repeat a point that i have made a number of times in the past. one of our most central aims in drafting the code is for it to be principles - based rather than rulesbased. there are a number of reasons why this is so, but for me, an important reason is that the more prescriptive the code is, the easier it is to get around. rules are easier to arbitrage than principles. if it's not expressly prohibited or explicitly discouraged, then it must be okay seems to be the historical experience. moreover, the more prescriptive and the more precise the code is, the less people will think about what they are doing. if it's principles - based and less prescriptive then, as i just said, market participants will have to think about whether their actions are consistent with the principles of the code. so where we are up to in the process? last week we circulated for comment the second draft of phase one of the code via the various fxcs including the australian fxc ( and central banks in those countries on the working group without an fxc ). this second draft incorporates comments on the first draft of the code that we had circulated at the beginning of february. the first draft attracted over 1, 400 comments. the comments were almost universally constructive and very supportive of the whole endeavour. i would like to thank those who took the time to provide them. in writing this second draft, we and the market participants group took full account of all of these comments. those who provided them can rest assured we have taken heed of them. but in saying that, you may not see your comment directly embodied in the redrafting. this in part, reflects the diversity of views on some issues in the code. that said, we have sought to incorporate the overall feedback in a manner that best reflects the objectives for the code that i set out above, namely that the code should promote a robust, fair, liquid, open, and transparent market. the comments on the second draft will be