In response to years of recent scandals, BIS has announced a comprehensive Fx Code of Conduct to take effect in 2017. While precise rules remain unannounced, the enforcement mechanisms will be left to individual governments.
The first comprehensive global code of conduct to regulate the scandal-hit foreign exchange market will come into force in May 2017, central bank officials said on Wednesday. Work on the new code by a committee from the Bank for International Settlements (BIS), a forum for central banks based in Switzerland, is the latest effort to head off further abuses and restore faith that the $5 trillion a day market is run fairly. It will deal with issues including automatic stop loss orders, and the difference between when banks are making markets themselves and when they are acting as agents for clients. Six codes of conduct currently in force will be scrapped in favour of the first global code whose scope will go beyond traders to include asset managers and trading platforms, a reflection of how the market is rapidly evolving.