The FX Global Code of Conduct - Should a corporate sign?

This discussion took place two days before the announcement of significant fines imposed by the European Union on a group of banks for malpractice in the FX markets. These fines – imposed on banks we would all usually trust – and the discussion below, highlight several points we would all do well to consider:

When handling FX, corporate treasurers often just focus on the rates obtained. This is an area where there is a lot of scope for doubtful practice: we need to be vigilant.

We all think we have good practices, but this is often in the form of gentlemen’s agreements and general intentions. It can be beneficial to codify what is acceptable and required, both from our own teams and our trading counterparts.

The FX Global Code of conduct is an attempt to have all market participants agree and adhere to a set of principles. It is a code, and it is a set of principles – it is not prescriptive. I encourage all corporate treasurers to take a look at it, and see objectively how we stack up against these principles.

·As usual, these concerns apply even more in emerging markets, where the lack of liquidity and transparency adds to the challenges