group comprises representatives of the central banks of all the major fx centres. this work is also very much a public sector – private sector partnership. we are being ably and vigorously supported in this work by a group of market participants, chaired by david. david's 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. hugh killen from westpac is the australian member of this group, representing the afxc. all parts of the market are being involved in the drafting of the code to make sure all perspectives are heard and appropriately reflected. there are two important points worth highlighting : first, it's a single code for the whole industry and second, it's a global code. on the first point, the code is replacing the existing codes of conduct that have been present in the fx market, including the aci model code used here in australia. importantly, the code covers 1 / 3 bis central bankers'speeches 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. hence the code is relevant for all of you here in this room. the way it is relevant will depend on your engagement with the market. the guidelines for appropriate conduct are relevant for the buy side as well as the sell side. on the buy side it will also help to give you guidance as to what you can reasonably expect from your counterparty as you transact your fx business. what this means in practice is that the steps different market participants take to align their activities with the principles of the code will necessarily reflect the size, complexity, type and extent of their engagement with the fx market. as i mentioned earlier, the first phase of the code was released in may 2016. it covers areas such as ethics, information sharing, aspects of execution and confirmation and settlement. the second phase covers further aspects of execution including e - trading and platforms, prime brokerage, as well as governance, and risk management and compliance. we have provided market participants with a number of opportunities to comment on the second phase draft. we will be sending out a fatal flaw version of the complete code for comment

next week. the distribution to market participants will be principally through the fxcs but also through other industry associations as well. again, we are endeavouring to ensure all perspectives are appropriately reflected in the code. the aim is for the full code to be published in may and we are on track to achieve that. adherence to the code alongside drafting the code, we have also been devoting considerable time and effort to thinking about how to ensure widespread adoption of the code by market participants. clearly, that has been an issue with the various existing codes that have been in place in a number of markets over many years. it is evident that they were ignored on occasion, wilfully or otherwise. one of our 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, we are working with the industry to produce a principles - based code of conduct rather than a set of prescriptive regulatory standards. it will not impose legal or regulatory obligations on market participants, nor will it supplant existing regulatory standards or expectations. but we do expect the principles in the code to be understood and adopted across the entire fx market. our approach to adherence has a number of dimensions. we laid out our overall approach to adherence to the code in new york in may last year. 3 one dimension is market - based adherence mechanisms. an important element of discipline should come from the market itself and we are working closely with market participants on this. the adherence to a voluntary code will only come about if firms judge it to be in their interest and take the practical steps to ensure the code is embedded in their practices. firms will need to take practical steps such as training their staff and putting in appropriate policies and procedures. we have provided a draft statement of commitment for firms to 2 / 3 bis central bankers