FXPA Cautions Over Prescriptive Nature of Proposed Amendments to FX Global Code
WASHINGTON, DC, October 28, 2024 – The Foreign Exchange Professionals Association (FXPA) cautions that proposed amendments to the FX Global Code and Disclosure Cover Sheets may be overly prescriptive.
In the feedback provided to the Global Foreign Exchange Committee (GFXC), FXPA reaffirms its commitment to the Code, which aims to foster a robust, fair, liquid, open, and transparent foreign exchange market, and commends the GFXC’s efforts to enhance transparency and stability within the FX market through these updates.
“We believe that aligning with the Code’s principles-based approach is crucial for benefiting all market participants,” FXPA states in comments submitted to GFXC today.
However, the FXPA cautions that an overly rigid framework could hinder widespread adoption of the Code, as it might not provide the necessary flexibility to accommodate varying jurisdictional regulatory requirements and promote responsible innovation and efficiency.
To ensure the amendments are effective, the FXPA suggests that they be accompanied by enhanced explanations, guidance and, where appropriate, cost-benefit analyses. FXPA believes this is essential for evaluating the potential market impacts of the proposed changes.
FXPA also notes that the public consultation period was notably short, making it challenging for market participants – who often operate across multiple jurisdictions – to adequately assess the proposed amendments, and urges GFXC to allow sufficient time and engagement for validating the feasibility and desirability of these changes with the broader market.
Furthermore, the FXPA encourages the GFXC to ensure that all market participants, including trading platforms and infrastructure providers, are represented throughout the amendment process. “It is vital to engage end-users and buy-side representatives to foster a constructive dialogue that encourages their commitment to the Code and to ensure that any adopted amendments deliver meaningful benefits,” FXPA states.
The FXPA’s membership, including its buy-side and platforms working groups, stands ready to collaborate with the GFXC to ensure the Code remains fit for purpose and enhances the integrity of the FX market.
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About FXPA: The Foreign Exchange Professionals Association (FXPA) is dedicated to promoting a fair and efficient foreign exchange market through collaboration among market participants, regulators, and industry stakeholders.
Media contact:
Julie Ros, Strategic Advisor jros@fxpa.org
FXPA Publishes White Paper Promoting Fair & Orderly FX Derivative Markets
WASHINGTON, DC, September 12, 2024 – The Foreign Exchange Professionals Association (FXPA) has published a white paper entitled Regulated FX Derivatives Trading Venues: Promoting Fair and Orderly Markets. The paper is the outcome of several months’ work by FXPA’s Trading Platforms Working Group and explores the potential risks posed by the current, uneven playing field that exists between regulated and unregulated trading venues operating in over-the-counter FX derivatives markets.
The paper focuses on the varying structures of trading venues, the potential impacts on market integrity, and the benefits of regulatory oversight for these venues. “While unregulated FX derivatives trading venues may, in some cases, offer higher leverage, lower deposit requirements to trade, lower fees for customers and less onerous onboarding requirements, when compared to regulated FX derivatives trading venues, those benefits may come at the expense of reduced customer protections resulting from lack of comprehensive regulatory oversight,” the report states.
“The presence of unregulated FX derivatives trading venues also introduces the possibility of regulatory arbitrage for FX markets. These dynamics raise concerns about fairness and market integrity around the operation of unregulated FX derivatives trading venues. Market participants should be aware of the regulatory status (or lack thereof) and attendant protections and risks of the platforms on which they decide to trade. The presence or absence of regulatory oversight can impact a range of issues, including the role of affiliated market makers, permitted trading practices, market surveillance, and overall market integrity,” the paper further states.
With the publication of this paper, FXPA aims to provide regulators, policymakers, and market participants with helpful insights into the industry, and promote informed decision-making.
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Since 2014, the Foreign Exchange Professionals Association (FXPA) has been representing the collective interests of the institutional FX market to advance a sound, liquid, transparent, and competitive global currency market to policymakers and the marketplace through education, research, and advocacy.
Celebrating its 10th Anniversary, FXPA Ushers in Officers, Directors
WASHINGTON, DC, February 26, 2024 – The Foreign Exchange Professionals Association (FXPA) elected a new slate of Officers and Board of Directors members at its annual meeting on February 20, 2024, marking its 10th anniversary as an organization.
Encompassing buy side, sell side, exchanges, trading platforms, and technology providers, the elections showcase the key tenets of the association, which are to represent the collective interests of professional foreign exchange market participants to advance a sound, liquid, transparent and competitive global currency market to policy makers and the marketplace through education, research and advocacy.
FXPA’s new Chair is Joe Hoffman, CEO of Mesirow Currency Management at Mesirow Financial in Seattle; Vice Chair is Dale Haver, Senior Managing Director, Global Head of FX Sales at State Street Global Markets in Boston; Treasurer is Jeff Roberts, Director, EBS Market Product at CME Group in London; and Lauren Rosborough Watt, Economics & Investment Manager at CalPERS in Sacremento, continues as Secretary. The four officers form FXPA’s Executive Committee, which sets the agenda for the upcoming year.
“The opportunity to serve as Chair of the FXPA is truly an honor, and I am committed to upholding the exceptional work of the FXPA,” affirms Joe Hoffman, CEO of Mesirow Currency Management. “Given the recent market fluctuations due to global tensions, inflationary pressures, shifts in monetary policy, as well as the outcome of the US election and the risk of recession, brings the potential for more FX volatility in 2024. I am dedicated to expanding the FXPA’s membership and I’m excited about collaborating with all members to echo the unified voice of the FX market.”
During 2023, FXPA launched three new working groups. The T+1 Settlement WG, working together with the Buy Side WG, produced a guidance paper for the buy side on preparations for the transition in May 2024. The Buy Side WG is also focussed on issues pertaining to transparency. The Trading Platforms WG is developing a white paper that focuses on FX Global Code compliance on trading venues, among other topics. Additional working groups include the Digital Assets WG and Off-Market Pricing WG.
FXPA also elected a slate of candidates to the Board, which is now comprised of:
Martin Knudsen, Senior Product Manager, FX Electronic Trading, Bloomberg
Lauren Rosborough Watt, Economics & Investment Manager, CalPERS
Scot Halvorsen, Assistant General Counsel, Cboe Global Markets
Jeff Roberts, Director, EBS Market Product, CME Group
Taylor Haberstock, Associate Trader, Global Income, Eaton Vance Management
Patrick Basilice, Chief Compliance Officer, Euronext US Inc, Euronext
Cathrine Poulton, Managing Director, Global Buyside Head of GlobalLink FX Product Sales, GlobalLink
Richard Turner, Senior Trader, Insight Investment
Joseph Hoffman, CEO, Mesirow Currency Management, Mesirow Financial
Christopher Matsko, Head of FX Trading Services, Portware
Dale Haver, Senior Managing Director, State Street Global Markets
The FXPA is a unique industry body that represents a diverse cross-section of the FX market to advance its mission to collectively represent the interests of professional FX industry participants. Since 2014, the FXPA has established itself as a respected industry thought-leader and resource for the industry, media, and global policymakers.
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The Foreign Exchange Professionals Association (“FXPA”) is a Washington-based organization that represents the collective interests of professional foreign exchange market participants. The group engages with key regulators and policymakers through education, research, and advocacy, with the goal of advancing a sound, liquid, transparent and competitive global currency market. See more at www.fxpa.org
FXPA Publishes Buy Side Guidance to Prepare for T+1 Settlement
The Foreign Exchange Professionals Association (FXPA) has published a guidance paper to assist buy side traders in their preparations for the advent of T+1 Settlement of US and Canadian equities, which takes effect in May 2024. The “Buy Side Guidance in Preparation for T+1 Settlement” includes a framework of voluntary, non-binding recommendations and was jointly developed by FXPA’s T+1 Settlement and Buy Side working groups.
The key driver behind the effort to create the guidance is the potential for T+1 settlement to increase the chances that transaction funding dependent on FX settlement may not occur in time, especially during busy periods. “Firms should consider the potential increase in operational risk across all aspects of their FX trading processes, including sales, trading, pre-, and post-trade operations, payments, and settlement,” FXPA states in the guidance.
FXPA acknowledges that the introduction of T+1 is not intended to increase FX settlement risk but cautions that there could be unintended consequences if market participants are not fully prepared. “FX Traders should conduct a full review of the scale of the challenge of T+1 for their FX trading businesses, considering trading relationships, credit, operational processes, funding, and settlement. Strategically, this may present an opportunity for firms to review the greater impact of an accelerating settlement cycle across asset classes,” FXPA concludes.
FXPA drafted the guidance to help buy side firms prepare for the transition to T+1 settlement based on feedback from members and guests during a September 2023 roundtable discussion on the impact of T+1 for FX trading that was jointly held with the Global Financial Markets Association’s Global Foreign Exchange Division (GFXD).
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Since 2014, the Foreign Exchange Professionals Association (FXPA) has been representing the collective interests of the institutional FX market to advance a sound, liquid, transparent, and competitive global currency market to policymakers and the marketplace through education, research, and advocacy. Current members include Bloomberg, Cboe Global Markets, CME Group, State Street Global Markets, Euronext, GlobalLink, LSEG, Portware, Singapore Exchange (SGX), Atlassian, CalPERS, Colorado PERA, Eaton Vance, Fidelity International, Insight Investment, Mesirow, and Microsoft. The guidance does not represent the specific individual opinion of any one particular member.
Enquiries: Julie Ros, Strategic Advisor to FXPA // +1 (646) 468-6550 // jros@fxpa.org
Fidelity International Joins FXPA as Advisory Member
The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of asset management firm, Fidelity International, represented by Nigell Todd, Head of Global FX Trading, as an Advisory Member.
The addition of Fidelity International further broadens FXPA’s unique membership base.
“FXPA’s work in areas that impact buy side traders of FX is what attracted me to the association. FXPA’s recent focus on the FX implications for buy side traders given next year’s planned move to T+1 settlement for US and Canadian equities has been of particular interest,” says Todd. “We look forward to working with industry colleagues from across the market landscape on this important issue.”
“We are thrilled to gain Nigell’s input on a variety of issues that our working groups are tackling this year. We welcome Nigell and his colleagues at Fidelity International into this intentionally diverse organization,” adds FXPA Chair, Susan Dauber, Head of Legal & Regulatory at Euronext FX and Chairperson of Euronext Markets Singapore.
Since 2014, the FXPA has been representing the collective interests of the institutional FX market to advance a sound, liquid, transparent and competitive global currency market to policymakers and the marketplace through education, research, and advocacy.
The Foreign Exchange Professionals Association (“FXPA”) is a Washington-based organization that represents the collective interests of professional foreign exchange industry participants. The group is designed to engage key regulators and policymakers through education, research, and advocacy, with the goal of advancing a sound, liquid, transparent and competitive global currency market. See more at www.fxpa.org
To learn more about institutional membership of FXPA, reach out to jros@fxpa.org
Atlassian Joins FXPA as Newest Buy Side Member
The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of software development firm, Atlassian – represented by Treasurer Alex Blackmur – as an Advisory Member.
The addition of Atlassian, which is headquartered in Sydney, Australia, marks a return to FXPA for Blackmur, who previously served on the FXPA Board as the representative from Microsoft.
“I am looking forward to resuming my work with FXPA, now representing Atlassian as an Advisory Member. FXPA is a great way to give back to the market, providing us with an important avenue to engage with industry peers and address issues that uniquely impact the buy side of the FX market,” says Blackmur.
“We are delighted to welcome Alex back to the FXPA fold. His perspective into a variety of topics will provide valuable insights into how the market is functioning for buy side participants,” says FXPA Chair, Susan Dauber,Head of Legal & Regulatory at Euronext FX and Chairperson of Euronext Markets Singapore.
Since 2014, the FXPA has been representing the collective interests of the institutional FX market to advance a sound, liquid, transparent and competitive global currency market to policymakers and the marketplace through education, research, and advocacy.
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The Foreign Exchange Professionals Association (“FXPA”) is a Washington-based organization that represents the collective interests of professional foreign exchange industry participants. The group is designed to engage key regulators and policymakers through education, research, and advocacy, with the goal of advancing a sound, liquid, transparent and competitive global currency market. See more at www.fxpa.org
Insight Investment Joins FXPA as Advisory Member
The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of Insight Investment, a global asset and risk manager headquartered in London, as the newest member to the industry association. FXPA represents the collective interests of the institutional FX market to advance a sound, liquid, transparent and competitive global currency market to policymakers and the marketplace through education, research and advocacy.
Insight’s membership is represented by Richard Turner, Senior Trader at Insight. Turner said: “I am looking forward to working with our industry peers at FXPA, addressing topics of particular interest to the buy side, as well as advancing best practices for all FX market participants.”
“We are excited to gain Richard’s input into a variety of topics that FXPA will be addressing in 2023,” adds Chair, Susan Dauber, Head of Legal & Regulatory at Euronext FX and Chairperson of Euronext Markets Singapore. “Insight Investment’s presence will further add an important dimension to the scope of our work.”
The FXPA is the only industry body that represents a diverse cross-section of the institutional FX marketplace. Since 2014, the FXPA has established itself as a respected industry thought leader and resource for global policymakers.
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The Foreign Exchange Professionals Association (“FXPA”) is a Washington-based organization that represents the collective interests of professional foreign exchange industry participants. The group is designed to engage key regulators and policymakers through education, research, and advocacy, with the goal of advancing a sound, liquid, transparent and competitive global currency market. See more at www.fxpa.org
Insight Investment is a leading global investment manager, founded in 2002 and headquartered in London. Insight primarily manages money for pension schemes by providing liability-driven investment strategies and investing in fixed income and currency and multi-asset. More information about Insight Investment can be found at: www.insightinvestment.com
FXPA Elects New Officers, Directors at Annual Meeting
The Foreign Exchange Professionals Association (FXPA) elected a new slate of Officers and Board Members at its annual meeting on February 14, 2023.
Effective immediately, Susan Dauber, Head of Legal & Regulatory, Euronext FX, and Chairperson of Euronext Markets Singapore, is Chair of FXPA; Chip Lowry, Senior Managing Director at State Street, is Vice Chair; Lauren Rosborough Watt, Investment Manager at CalPERS, is Secretary; and Paul Houston, Global Head of FX at CME Group, continues as Treasurer. The four officers form FXPA’s Executive Committee, which sets the agenda for the upcoming year.
Dauber succeeds Acting Chair, Chris Leonard-Appleton, Head of FX Risk & Regulation, LSEG, who remains on the Board, and Lowry succeeds Tod Van Name, Global Head of FX Electronic Trading, Bloomberg, who was serving as Acting Vice Chair. Rosborough Watt succeeds Jordan Barnett, MD at BNY Mellon.
“It is an honor to be elected as Chair of the FXPA and to have this opportunity to continue Chris’ fine work and leadership,” says Dauber. “With recent volatility driven by global tensions, inflationary pressures and shifts in monetary policy, the FX market will undoubtedly remain top of mind. It would appear FX volumes are set to continue to grow in 2023 with an increasing interest in the APAC region and we look forward to continuing to expand the FXPA’s membership and outlook. I look forward to working with all members as we represent the collective voice of the FX market.”
In other news, Alex Blackmur, Director of FX, Corporate Finance and Strategic Investments at Microsoft, will lead a new Buy Side Working Group for FXPA. FXPA has recently increased its buy side Advisory Membership with the additions of Mesirow and Insight Investment.
FXPA also elected a slate of candidates to the Board, which is now comprised of: Martin Knudsen, Senior Product Manager, FX Electronic Trading, Bloomberg; Rosborough Watt of CalPERS; Mike Margolis, Assistant General Counsel, Cboe; Houston of CME; Dauber of Euronext US; Leonard-Appleton of LSEG; Blackmur of Microsoft; Christopher Matsko, Head of FX Trading Services, Portware; KC Lam, Head of FX and Rates, Singapore Exchange (SGX); and State Street’s Lowry.
The FXPA is a unique industry body that represents a diverse cross-section of the FX market to advance its mission to collectively represent the interests of professional FX industry participants to advance a sound, liquid, transparent and competitive global currency market to policymakers and the marketplace through education, research and advocacy. Since 2014, the FXPA has established itself as a respected industry thought-leader and resource for global policymakers.
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The Foreign Exchange Professionals Association (“FXPA”) is a Washington-based organization that represents the collective interests of professional foreign exchange market participants. The group engages with key regulators and policymakers through education, research, and advocacy, with the goal of advancing a sound, liquid, transparent and competitive global currency market. See more at www.fxpa.org
FXPA Welcomes Mesirow as Newest Member
The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of Mesirow as the newest member to the industry association. FXPA represents the collective interests of the institutional FX industry to advance a sound, liquid, transparent and competitive global currency market to policymakers and the marketplace through education, research and advocacy.
Mesirow Currency Management just celebrated a record year – surpassing $130 billion in assets under management as of December 31, 2022.[1]
Joe Hoffman CFA, CEO, Mesirow Currency Management, says: “We look forward to working with the broad spectrum of FX market participants that comprise the membership of FXPA. Our deep commitment to advancing best practices align well with FXPA’s goals of championing a robust FX market for all industry participants.”
“We are thrilled to have Mesirow join the membership of FXPA,” adds Acting Chair, Chris Leonard-Appleton, Head of FX Risk & Regulation, LSEG. “We are excited to welcome Mesirow’s voice to our association.”
The FXPA is the only industry body that represents a diverse cross-section of the institutional FX marketplace. Since 2014, the FXPA has established itself as a respected industry thought leader and resource for global policymakers.
The Foreign Exchange Professionals Association (“FXPA”) is a Washington-based organization that represents the collective interests of professional foreign exchange industry participants. The group is designed to engage key regulators and policymakers through education, research, and advocacy, with the goal of advancing a sound, liquid, transparent and competitive global currency market. See more at www.fxpa.org
[1] Data as of 12.31.2022 unless otherwise noted. Currency assets under management includes AUM associated with (i) active and passive currency risk management products $130.20 billion, (ii) non-fx overlay strategies such as equitization and beta overlays $671.03 million, and (iii) alpha strategies $32,482,451. In all such cases, AUM is calculated based on notional value of currency investments. Additionally, AUM for alpha strategies is adjusted because clients can select a volatility target (generally between 2% and 12% annualized), which is normalized to 2% in order to create a consistent depiction of alpha strategy AUM. This results in a “scaled” AUM, which is higher than the actual aggregate notional value of all alpha strategy portfolios if clients have selected a volatility target higher than 2%. As of 12.31.2022, the “unscaled” AUM for alpha strategies was $5,852,78
