Mr. Chairman, Members of the Management Board, Members of ACI, Distinguished Guests, Ladies and Gentlemen, Good evening.
It is an honour for me to be standing in front of you tonight in this spectacular venue here in the wonderful city of Milan. The strength of the ACI in Italy is evident here at this conference, and we, as global members of ACI will do over the coming days as we have always done, which is to benefit from the incredible enthusiasm of our member-volunteers and organisers who make these events such a resounding success. I am sure that you have participated actively in the agenda set out by the ACI Italy organising committee. This is your event, and it’s wonderful to see so many of you. My name is Marshall Bailey, and I am the President of ACI Financial Markets Association International. As President, it is my responsibility to lead the ACI across the entire globe, in any and all of the over 65 countries that have an ACI affiliation, and who are members of our Association. I bring over 25 years of experience in the wholesale markets, having worked in 5 countries in blue-chip organisations such as UBS, Royal Bank of Canada, State Street Bank, and on the Boards of entities such as State Street Global Markets International, CIBC World Markets and UKFI, as Chairman, or CEO, or Director. I have always felt a deep connection to our industry, and particularly to the application of best practices. I also like to go sailing, and pursue time on sail boats.
ACI has grown tremendously since its inception in 1955… our history is deep and varied, and benefits us in many ways. I believe that while our strength is evidenced by the work that takes place at national level, our unity comes from recognising that we are stronger together. Together we form part of the international fabric of the financial markets. Our history of growth and relevance to the markets, and the list of the accomplishments of people that have gone before us, reminds us that we have a duty to help our members, and an obligation to leave the ACI in an even stronger position that when we inherited it. The future of our Association is bright, and we are growing. While we are right to be proud of our past, we must focus on our future.
As leader, and in tandem with the ACI Committees and Boards I attend, I have made strict application of three filters to drive what we do… each decision we take, and each path we forge at International level, must pass by this simple test: 1) Are the decisions we are making, benefitting ACI members internationally? 2) How might the deployment of our membership fees and revenues from education help us to grow, and what returns might we expect for future generations? 3) Are we spending time in areas that each person will benefit from, or just a few, and will each member be able to bring this growth to the benefit of their national, regional and international teams. As we know in sailing, a rising tide can lift all boats. ACI International must help the tide to come in, and bring all of our current and future members the opportunity to be proud of ACI.
It has been approximately 10 months only since I was inaugurated at the ACI World Congress in Berlin in late March of 2014. The leaders of ACI Germany put on an amazingly well-organised event. It was at the same time, less than one year ago, that I laid out a vision for ACI Financial Markets Association.
The vision is to be recognised as the financial markets association of choice for ethical conduct and best practise, and to provide self-certification in the wholesale financial markets industry.
Our three main committees have accomplished a tremendous amount over the years: Just look at the growth of the educational offering of ACI – we now not only have the ACI Dealing Certificate, so coveted around the world, and the Operations Managers Certificate, but a whole series of modules leading to the ACI Diploma. In my travels over the past 10 months, responding to the requests of various national ACI leaders, I have had the pleasure of meeting young men and women who have recently taken our courses. I have attended events in places such as Beirut for the 50th anniversary of ACI Lebanon, the annual congresses of ACI Austria and ACI Czech Republic, and listened to lists of local members congratulate each other as they cross the stage to receive their certificates.
I have attended ACI events in Italy, France and Belgium, and witnessed the strength and diversity of our people. In ACI Switzerland I spoke with four young traders, all of whom had completed the entire Diploma, and were very proud to have done so. And just last week I met a man from ACI Italy named Marco Ferraro, who informed me that he had completed our courses recently, and that he thought they were very professional and demanding. Marco, if you’re here, I congratulate you again.
I especially want to thank Claudia Segre for her role as Chair of the Board of Education, and while she is stepping down as Chair, she will be replaced by a new leader, who will carry on this extremely important role as we build it even further. There is so much potential for this area to grow, and we must capture it with urgency. To all of you who make it possible to spread our ACI education globally, I salute you.
The ACI FX Committee has responded to some important surveys, such as the Financial Stability Board’s request for answers as they consulted with the market on FX benchmarking, and to the Bank of England’s Fair and Effective Market Review, which closed for consultation just last week. Of particular note is the Chair of that Committee, Mr Stephane Malrait, who brings it all together, and a special mention to a wonderful lady named Anne-Maria Rothenstein who is unable to be here this evening, but has given her time freely to review our documents and contribute so solidly.
However, ACI is an organisation that includes increasingly diverse types of members, and we must ensure we cater to their interests and needs as well, and that we demand a lot of the leadership in these areas: ACI Italy is a great example of a body that holds professional members from FX, of course, but also from Money Markets, Treasury and Asset Liability Management, Fixed Income and a wide variety of other activities in the wholesale markets. There is room for leaders to step up globally and lead these areas, and we welcome your contribution.
The same is true of perhaps our most visible Committee, the Committee for Professionalism, which for years has been the keeper of the ACI’s world-famous and respected Model Code. The ACI Model Code is in very strong demand as the scandals of FX manipulation and Libor setting have costs us all so dearly. It is Mr David Woolcock and his team on the CFP that have held the light high, and who have shown that we, as a diverse Association of volunteers, can teach the financial community about best ethical practices, and that many bankers are focussed on ethical conduct. While so many large players seem to have forgotten that ethical conduct and trust are the single most important aspect of trading, that “Our Word Is Our Bond”, our ACI CFP has held the answers. And now, as the world seeks answers to these challenges, we as the ACI can provide them.
As I have said, only 10 months ago I articulated a vision of self-certification for the participants in the wholesale financial markets. We at ACI can bring all of our strengths together in one simple package by providing self-certification for the industry. We can assemble our minds, we can teach our collective skills, and we can certify through our education that we are transferring the best possible practices to our members.
Over the past months the Bank of England has been leading the industry-wide consultation known as the Fair and Effective Markets Review. It intends to focus on providing fair and effective markets to assist with growth in the global economy, and will review all products across the Fixed Income, Currency and Commodity space, also known as FICC.
Among the FEMR work is a review of the need for ethical conduct training, and ethical conduct rules, and how these rules and training packages might be applied globally.
Globally similar yet distinct regulatory regimes means that the central bankers and regulators themselves need to allow our 24 hour a day market to function by endorsing the best practices in the market. If the central bankers know how these markets function, they will be ready to endorse our proposals, as our proposals are not only global, they are best practice.
There is another saying that sailors use: The expression is: If you don’t know to which port you are sailing, no wind is favourable. We know where we are sailing, and we are guided by our Model Code and best industry practices. It is not just the ACI and the Bank of England that is calling for ethical conduct and training: earlier this week the Financial Times reported that the British Bankers Association is also calling for regime change.
The BBA is saying that all financial market traders should be required to gain professional qualifications in an attempt to avoid having a much tougher licensing regime imposed on the industry.
In their submission to the FEMR, they state “Everyone undertaking activity in wholesale fixed income, currency and commodity markets should be required to pass exams and become professionally qualified”
But it’s not just the BBA - The Chartered Institute of Securities and Investment, one of the bodies that awards professional qualifications, also gave its support to the BBA position, but went a step further.
“We would tighten this license and make it annually renewable, so it will ensure that an individual is professionally qualified and has adhered to his code of conduct, but also would confirm that the individual maintains up to date knowledge” – That is the CISI. So what is the ACI FMA role in this?
Today the ACI Financial Markets Association can announce the following
Firstly, the new 2015 ACI Model Code is ready for release. In it, we not only continue to provide practical guidance on ethical conduct in wholesale financial markets, but we also provide new guidance on certain areas like “last look”, which is so important to the electronification of markets.
Secondly, we are announcing the ACI Model Code eLearning and Certification Portal, or ELAC, available on-line to our members, to answer the global industry call for the licensing regime. While we believe in further education, not further regulation, we stand ready and able to provide exactly the training so demanded across the FICC markets. We stand prepared to do whatever is necessary to work with the global regulators to provide exactly the licensing regime required.
Not only that, we are announcing the ability to make this conduct and trading education available to all institutions and individuals globally, to match the needs of local and international regulators to create a level playing field across markets. We agree with the industry that we must avoid the opportunity for ethical arbitrage across time zones, so that all traders behave consistently ethically, in accordance with established and acceptable global industry norms.
Our ACI Model Code, long established as the global leader in cross-jurisdictional conduct, has been written with both the sell side and the buy-side in mind. The new acronym ELAC not only stands for the eLearning and Certification Portal,its can also stand for eLearning Annual Compliance Portal. We are offering the chance to have constant updates and annual reminders of your obligation as professionals to maintain the highest standards.
We believe that traders at hedge funds, asset managers, central banks and other non-bank organisations should be subjected to the same professional qualifications requirement to ensure “a level playing field. Our Code has been written with this in mind, and with them at the table. We are already endorsed by a number of important industry bodies.
Recent events in the markets, such as the change in SNB policy on the Swiss franc cap, announcements of QE by the ECB, and other activity, have led to some challenging trading conditions. While the size of the Swiss franc move is unprecedented in currency market history, it does serve to illustrate the need for adequate systems, procedures and controls in the front office, operations and in risk management.
We recommend that the market participants refer to The ACI Model Code, which has sections on a number of issues that have arisen recently. David Woolcock will be saying more on this soon. Our ACI Model Code can be found on our website www.acifma.com/model-code
Further, we remind people that the ACI Financial Markets Association offer dispute resolution and arbitration services that may be engaged and deployed, should these services be required. We at ACI have rigorous training for our people, and we have been bringing the benefits of the ACI Model Code to life for our members. We answer this need for a testing regime – and we can offer all employers the ability to prove internally and to their clients that they have done their best, and received the endorsement of their management.
Our 2015 Model Code, released here in Milan, is ready for inspection. Our ACI Model Code self-certification exam is ready for roll out across the financial markets, and our employers will be encouraged by its availability around the world. We can self-certify, we can demonstrate that ACI membership has tremendous value. And courtesy of some technology partners, we can do this on a global scale. Go to our new website and see!
We are in command of our own ship, driving the financial markets to re-establish ethical conduct and best practice. And this is not just me and the Management Board, this is David Woolcock, Stephan Malrait, Claudia Segre, the Steering Committee, and all of the many, many people who drive the work we do.
2015 will be a very important year for us as we continue this rapid pace of delivering on our promises, and getting all of the opportunities within ACI to come to the surface. Take a look at what we have accomplished together in the past 10 months and over the last 60 years. It is amazing. It is the rightful output from our Association with its roots in Paris in 1955. Thank you all for listening, and may you join me in being proud to be a member of ACI Financial Markets Association