GFXC Update (May 2024)

3rd May 2024

By Lisa Dukes
Member of UK FX Joint Standing Committee (chaired by Bank of England)
UK Private Sector Representative to the Global FX Committee (GFXC

GFXC Meeting Update

The last Global FX Committee (GFXC) meeting was held virtually at the end of last year. Below is a brief summary of the key discussions and developments.

I look forward to updating you following the next in-person meeting, which is to be hosted by the European Central Bank in a few months’ time.

Please get in touch at if you would like to know more, or to send me feedback on this newsletter. It would be helpful to hear from you what resonates on FX Global Code engagement and what would help you manage your stakeholders.

Proportionality Self-Assessment Tool

We reviewed the Proportionality Self-Assessment Tool, which was launched at the previous meeting (June 2023). The tool works by enabling market participants to answer a series of questions to generate an easy-to-read report pinpointing the principles of the Code that are most relevant to them – perfect for those looking at the Code for the first time, but also to those looking to support their regular review process.

If you have used, are using or even plan to use the tool, please tell us how you are using it, what works, what doesn’t. All feedback will help us gain an insight into how it is being used and how we can make improvements.

Motivation for FX Code Adherence – Working Group

I really value being a member of the Motivation for Adherence Working Group where the aim is to promote a deeper understanding of the benefits and increase the visibility of the Code for market participations.

The 2023 meeting outlined a c.8% annual growth in the level of commitments to almost 1,300 of recorded signed statements of commitment. The number of corporates with shared statements of commitments remains low, however, more encouragingly many are now incorporating the ethos and key principles into their policies and holding their stakeholders accountable to be registered which is positive.

Our Working Group Committee members regularly present at conferences and seminars and are partnering with various organisations to increase awareness. I hope to see many of you at these events– please do not hesitate to come and introduce yourself. I will be speaking at the ACT Annual Conference in Liverpool in May.

ISDA Definitions

ISDA joined the meeting to present the planned updates to ISDA FX Definitions. The new definitions are some way off, due to be finalised towards the end of 2025 with implementation towards the end of 2027 – but are still something to be aware of.

Based on the feedback received from an ISDA survey, the substantive changes to the definitions include updates to:

  • Disruption Events/Disruption Fallbacks for FX
  • Calculation Agent provisions (from previous ISDA and EMTA work on these provisions implemented since publication of the current FX Definitions)
  • Rounding conventions
  • Novation provisions (from the previous ISDA Novation Protocol)
  • Other fallbacks (from the ISDA Benchmarks Supplement)
  • It was also noted that consideration was being given to whether updates were required in relation to unexpected holidays and CBDCs

2024 Code Review

We also discussed the takeaways of the GFXC survey that was discussed in my last update (thank you to those who fed comments in). The survey sought feedback on the 2021 updates to the Code and its associated material, as well as areas of focus for the 2024 Code review.
Most survey respondents thought that changes to the Code would not be required, on the basis that it remains fit for purpose. The criteria for change to the Code include:

  • The issue was reflective of changes in market practice, structure, or environment of the global FX market since the launch of the Code.
  • The practice had taken place in the global FX market.
  • Industry practice in the area of concern would be improved through the development and industry-wide adoption of high-level principles of conduct and/or examples.
  • The clarification of the practice would contribute to good structure, functioning, and communication across the FX market.
  • The current formulation of the issue/principle (or the absence of any statement) would be an impediment to committing to the Code for a significant share of market participants.

The Global and Local FX Committees are working to finalise the priorities for the 2024 Code review with the revised version of the Code anticipated to be published in Q4 2024.

FX Settlement Data

In order to give a more complete view of the collected settlement data and global settlement risk, a new approach for collecting the data was supported by the GFXC. Whereby central banks continue to gather FX Settlement data for firms headquartered in their jurisdictions, but overall responsibility for data aggregation and publication would be transferred to the GFXC.

Where possible, central banks that already conduct and co-ordinate semi-annual FX surveys will adopt the new approach for collecting FX Settlement data for the April 2024 survey round, subject to readiness of systems and processes for producing and collecting the new data fields.

Accelerated Settlement and its Impact on FX Markets

In the last update we flagged the upcoming change to T+1 for US Securities Settlement which will come into effect on 28 May 2024. Many should have at the back of their mind the potential for impacts and ultimately the challenges of the accelerated settlement cycles. Other financial hubs like the UK and EU are also eyeing shorter settlement cycles, although these changes require unified regulations and tech investments.

Other Reading

For those of you who enjoy diving deeper, here are some extra resources that you may find interesting.

Full minutes from the last GXFC meeting:

Chaboud, Chung, Goldberg, and Nordstrom recently published in the Federal Reserve Bank of New York blog a post entitled: Towards Increasing Complexity: The Evolution of the FX Market. The authors explain that the FX market has evolved at length over time, with significant changes in the types of market participants and the instruments traded. Their analysis supports that maintaining a dynamic price discovery process and fostering a level playing field among participants are areas to watch. The authors also explain that a focus began in response to concerns about the behaviour of some market participants and investigations revealing serious misconduct over a decade ago. In response, the FX Global Code was published in 2017.

For its part, the ACI Financial Markets Association (FMA) recently published a Briefing Note on USD T+1 Securities Settlement and the Impact on FX. It aims to provide an overview of the key issues that have been raised by members of the ACI FMA FX Committee and their contacts on the implications of this change for FX market participants. Hitherto, there is no intention for FX Spot settlement to move across the markets from T+2 to T+1. That said, such changes in US securities settlements will quite plausibly impact the FX market. Take a look at the complete notes.

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