IGTA Journal - Summer 2018

world using the Statement as a means to demonstrate adherence to the Code. To lead by example, many central banks, including MAS, have also issued Statements and published these on our websites. Central banks have also requested that our FX counterparties issue the Statement. Many FXCs have linked membership of the FXC with Code adherence. These efforts have resulted in a “bumper crop” of Statements being issued at the one-year anniversary of the Code. We have also seen about 12 public registers being established in response to market demand. These are repositories where market participants can publish their Statements, to publicly demonstrate adherence to the Code. In addition, the GFXC launched a Global Index of Public Registers (or the Global Index) in May this year, which links these public registers. The Global Index has a search function which enables the quick identification of market participants that have published Statements on the participating public registers. As at mid-August, the Global Index had about 420 Statements, from 9 participating public registers. The GFXC is continuing with efforts to include more public registers, and this will be an important and highly visible way to track adherence progress to the Code. The GFXC has also been expanding its membership to include more jurisdictions. From the original 8 FXCs, we have seen a number of new FXCs being established in the last year. These include the FXCs in Mexico, South Africa, Scandinavia and Switzerland. Through the membership expansion, the Code will become more global as these FXCs promote the adoption of the Code within their jurisdictions. 7 Second, on embedding the Code and integrating it into the FX market. If done well, we should see market behaviours reflect the good practices set out in the Code. We have seen that the process of issuing the Statements has prompted internal reviews within many firms, where market participants considered how the Code could apply to their business. In issuing our Statement, we have done the same in MAS. It has been a helpful and meaningful exercise to benchmark our internal processes against these good practices. We have also seen a number of training tools being developed by market participants to support learning, and these have enhanced the ecosystem of good practices within the FX market. Another key area where we think the Code has enhanced market behaviour is that a number of market participants have updated client disclosures to provide greater transparency, and to incorporate the principles within the Code. 8 Third, on evolution of the Code. When the Code was launched, the GFXC has stated that the Code will need to evolve over time to promote a robust, liquid and transparent FXmarket. The Code has become the platform or reference point for discussing issues relating to the FX market. This is a good outcome where emerging issues are identified, debated and addressed within the Code. And this is an important element to keep the Code relevant over time. Over the past year, the GFXC has also consulted on a particular aspect of Principle 17 on “last look”. Through that consultation process, the Code has been updated. Feedback from market participants has indicated that the consultation process in place is an appropriate one to update the Code going forward. It has also been heartening to hear feedback from many FXCs at the recent GFXC meeting that the Code is “fit for purpose”. There is also general acknowledgement that the Code provides a credible platform to further strengthen good practices and market behaviour. 2 / 5 BIS central bankers' speeches IGTA eJournal | Summer 2018 | 30