ACI President, Marshall Bailey comments:
“These charges make sobering reading and are another wake up call to the FX market that it needs to address behavioural issues. Foreign exchange is the world’s largest market and most important market, as it facilitates trade and economic activity. It is vital that we regain trust in its operation. It must operate to the very highest standards. Clearly some in the market have fallen short of this standard.
"As many of the issues the market experienced are due to individual conduct, it is critical to embed a strong culture of individual accountability and reinforce the right messages across all staff members.
“There is now a real chance to learn and to ensure the right practices are applied and that regulators and market practitioners are working closely to establish a common set of standards and the best behaviour possible, based on an industry standard single code of conduct.
"The ACI Financial Markets Association is working with the banks and regulators now to create a new framework to monitor and measure compliance with a common code, with advanced technologies to measure individuals, and report back.
“An e-learning and certification tool, called ELAC, will allow members to learn through interactive scenarios to demonstrate how conduct rules can be applied in a variety of situations. Measuring and monitoring progress is central to behavioural change and the ELAC portal is designed to ensure any knowledge or conduct gaps are swiftly addressed by supervisors.
“This technology will be part of the solution to ensuring institutions and individuals learn the lessons and that there is no repeat of this behaviour which has damaged the reputation of the FX market.
“It will enable banks to reduce their conduct risk and align themselves with the global regulatory environment. It facilitates easier teaching and testing of the model code or any single future code, and allows individuals and their employers to learn, test and monitor their understanding. It should also help ensure banks do not face this level of disruption to their business activities or face such fines due to individual malfeasance and poor conduct."
About the ACI
The ACI is the leading association of wholesale financial market professionals from the foreign exchange, money fixed income and derivatives markets with a growing membership of more than 13,000 from 60 countries. Its mission is to contribute to the market's development through education, market practices and technical advice.
The ACI Model Code is a universal code of conduct, with comprehensive guidelines and best practices which span the FX, fixed income and commodity markets. It covers a broad range of conduct issues, from the detailed processes of the back office right through to the up-to-date functions of the electronic platforms utilised by the front office.