Speech Interview with Guy Debelle on the FX Global Code Launch at the GFMA

Transcript

So the Global Code is important because what we are doing is addressing the deficit of trust that has been present in the FX industry, both within the industry and between the industry and the public as a result of various events that have happened over the last few years and so there's a need to move the market to a better place. The Global Code sets out a common set of principles around good practice, which will help facilitate moving the market to that better place and address that deficit of trust that there is in the industry.

The Code has a couple of important angles. One, it is global and secondly it applies across the market.  So it applies across the market in the dimension of being right round the globe, it also applies right across the wholesale market in terms of all of the participants in the market. The way in which it applies depends on what exactly you are in the market and we've made it very clear that the Code is proportionate to the nature of your engagement with the market but the important point is, the Code is global and it is applicable right across the wholesale FX market.

How is it being rolled out in my region?  I'll talk about the Asian region and particularly, obviously, my own region of Australia. In Australia, the Australian Foreign Exchange Committee has endorsed the Code. We have an expectation, we have a requirement, actually, that all of our members of the committee sign the Statement of Commitment and adhere to the Code. More broadly across the Australian foreign exchange market, we are engaging with the various associations there, the Australian Financial Markets Association has released a statement today supportive of the Code and will be promoting it to its members. Previously in Australia, we've followed the ACI code and as ACI has made clear, it is adopting the Global Code wholesale, so we have a lot of ACI members in Australia, so through that, it has been rolled out to them and then we've also engaged with a number of other industry associations, including the Corporate Treasurers to address the corporate sector, but also the superannuation and asset management sector in Australia, so making it clear to them what it involved, how it applies to them.

Across the Asian region more generally, there are a number of different angles. One, we actually have a number of Asian Foreign Exchange Committees on the newly constituted Global Foreign Exchange Committee, and they're in addition to what had been there previously.  So originally, in our part of the world, we had Singapore, Hong Kong, and Japan, along with ourselves from the Asian region.  It has now been extended to include China and Korea, so that is new.  Moreover, in the Asian region more generally, I've been promoting it to the other jurisdictions, such as Indonesia and Malaysia, Indonesia and Malaysia both use the ACI, so the ACI code naturally rolls out to them as well.

So we were commissioned to address this deficit of trust a bit over two years ago now. How we got to putting the Code together involved the 15 or 16 central banks from the major foreign exchange centres, so all the way from 1 down to 16 have been involved in the process, and then we have also worked together with the private sector through the Market Participants Group, which is broad both in coverage across the industry and also across the globe.  I think one important, very important, aspect of all of this is it's a public/private exercise. The Code is voluntary in nature, so it's not regulation but it is very much a joint public sector/private sector initiative and it has involved tremendous input from the private sector group, led by David Puth, along with the input from the central banking side, so it is very much a collective effort and reflects the collective judgement of both the public and the private sector as to what constitutes good practice in the market.