Is that a difficult question?
Well, it certainly does not carry the drama of Shakespeare’s Hamlet...
Nevertheless, how to answer it may raise doubts for Market Participants that have signed or have the intention to sign the Statement of Commitment to the FX Global Code.
Having been published in May 2017, the FX Global Code has now been adopted around the world by several institutions from all sides of the industry. The Statement of Commitment, as Annex 3 of the FX Global Code Code, is a document that can be used by all Market Participants to demonstrate their acknowledgement of the good market practices detailed in all 55 principles of the FX Global Code, in addition to showing their commitment to implementing those practices.
The Statement of Commitment is voluntary as the FX Global Code, and Market Participants can use the document in various ways. There are some examples of institutions that have published it in their website, others have chosen to provide the document directly to their market counterparties and some institutions have delivered them to their local Central Bank.
Then we have the Global Index of Public Registers, which is managed by the Global Foreign Exchange Committee and currently includes 16 Participating Public Registers. By the end of December 2019, there were close to 1.000 Statements of Commitment published in that Global Index. Even though there are some duplicate entries (some institutions have published their Statement of Commitment in more than one Participating Public Register), this is a fantastic demonstration of how the foreign exchange industry is embracing the FX Global Code, its principles and the good market practices they advocate.
Of course, there are ongoing challenges, but the industry is moving in the right track, so it is very important that all entities with activities in the FX Market recognise how relevant is the adoption of the Code’s principles into their daily practices and procedures.
Regardless of the decision taken by each Market Participant on whether to publish the Statement of Commitment or not, or when to sign it, it is absolutely essential that all institutions involved in the FX Market start implementing the principles of the FX Global Code, considering the concept of proportionality embedded in it as well as the depth of their involvement in that Market.
The largest financial market in the world needs all its participating institutions to embed the principles of the FX Global Code. There is no doubt that these good market practices will further improve how foreign exchange transactions are executed globally so the full commitment of all Market Participants is categorically needed.
As Shakespeare quoted in another of his great works: “It is not in the stars to hold our destiny but in ourselves.”
Article by Rui Correia, Director and Chair of Board of Education at ACI FMA