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FOREIGN EXCHANGE MANAGEMENT AND PRACTICE

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  • #112610 Reply
    Rinku Das (Hazra)
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    FX Global Code

    The FX Global Code July 2021 (Global Code) is a set of global principles of good practice in the foreign exchange market, developed to provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. It was developed by a partnership between central banks and Market Participants from 20 jurisdictions around the globe.

    The purpose of the Global Code is to promote a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of Market Participants, supported by resilient infrastructure, are able to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour.

    The Global Code does not impose legal or regulatory obligations on Market Participants, nor does it substitute for regulation, but rather it is intended to serve as a supplement to any and all local laws, rules and regulations by identifying global good practices and processes.

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    • #112612 Reply
      Rinku Das (Hazra)
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      The Global FX Code(FOREIGN EXCHANGE) is organised around six leading principles:

       Ethics: Market Participants are expected to behave in an ethical and professional manner to promote the fairness and integrity of the FX Market.

       Governance: Market Participants are expected to have a sound and effective governance framework to provide for clear responsibility for and comprehensive oversight
      of their FX Market activity and to promote responsible engagement in the FX Market.

       Execution: Market Participants are expected to exercise care when negotiating and executing transactions in order to promote a robust, fair, open, liquid, and appropriately
      transparent FX Market.

       Information Sharing: Market Participants are expected to be clear and accurate in
      their communications and to protect Confidential Information to promote effective
      communication that supports a robust, fair, open, liquid, and appropriately transparent
      FX Market.

       Risk Management and Compliance: Market Participants are expected to promote and
      maintain a robust control and compliance environment to effectively identify, manage,
      and report on the risks associated with their engagement in the FX Market.

       Confirmation and Settlement Processes: Market Participants are expected to put in
      place robust, efficient, transparent, and risk-mitigating post-trade processes to promote the predictable, smooth, and timely settlement of transactions in the FX Market.

    • #112613 Reply
      Rinku Das (Hazra)
      Guest

      To Whom Does the FX Global Code Apply?

      The Global Code is written with this diversity in mind and is expected to apply to all FX Market Participants that engage in the FX Markets, including sell-side and buy-side entities, non-bank liquidity providers, operators of FX E-Trading Platforms, and other entities providing brokerage, execution, and settlement services.

      The term Market Participant is generally used to refer to both firms and personnel, per the definition.
      However, in some cases it will be clear that a principle is by its nature more relevant to only one or the other.
      For example, certain principles deal primarily with business or firm-level policies and procedures rather than individual behaviours. The terms “firm” and “personnel” are occasionally used where principles focus on good practice by firms with regard to personnel in their capacity as such, and vice versa.

      Market Participants are as described below:

       financial institutions;
       central banks, except where this would inhibit the discharge of their legal duties or
      policy functions;
       quasi-sovereigns and supranationals, except where this would inhibit the discharge of
      their organisational policy mandate;
       asset managers, sovereign wealth funds, hedge funds, pension funds, and insurance
      companies;
       a corporate treasury department, or Corporate Treasury Centre entering into external
      (non-group) transactions either on its own account or on behalf of the parent companies, subsidiaries, branches, affiliates, or joint ventures of the group it represents;
       family offices running treasury operations;
       benchmark execution providers;
       non-bank liquidity providers; firms running automated trading strategies, including
      high-frequency trading strategies, and/or offering algorithmic execution;
       brokers (including retail FX brokers); investment advisers; aggregators; and analogous intermediaries/agents;
       remittance businesses, money changers, and money services businesses in their interactions in the wholesale FX Market;
       FX E-Trading Platforms;
       affirmation and settlement platforms; and
       any entity classified as an FX Market Participant in the relevant jurisdiction(s).

    • #112614 Reply
      Rinku Das (Hazra)
      Guest

      Global Foreign Exchange Committee (GFXC)

      The Global Foreign Exchange Committee (GFXC) was established in May 2017 as a forum bringing together central banks and private sector participants with the aim to promote a robust, liquid, open, and appropriately transparent FX market in which a diverse set of participants, supported by resilient infrastructure, are able to confidently and effectively transact at competitive prices that reflect available information and in a manner that conforms to acceptable standards of behaviour.


      The objectives of the GFXC are:

      to promote collaboration and communication among the local foreign exchange committees (FXCs) and non-GFXC jurisdictions with significant FX markets;
      to exchange views on trends and developments in global FX markets, including on the structure and functioning of those markets, drawing on information gathered at the various FXCs; and
      to promote, maintain and update on a regular basis the FX Global Code (the Code) and to consider good practices regarding effective mechanisms to support adherence.


      Membership

      Members of the GFXC include central bank-sponsored Foreign Exchange Committees and similar structures in various regions. Each member Foreign Exchange Committee designates a central bank and private sector representative for the GFXC. Members currently include:

      Australia – The Australian Foreign Exchange Committee

      Brazil – Foreign Exchange Committee

      Canada – The Canadian Foreign Exchange Committee

      China – China Foreign Exchange Committee

      Euro Area- The Foreign Exchange Contact Group

      Hong Kong – Treasury Markets Association

      India – Foreign Exchange Committee

      Japan – Tokyo Foreign Exchange Committee

      Mexico – The Mexican Foreign Exchange Committee

      Russia – Moscow Foreign Exchange Joint Standing Committee

      Scandinavia – Foreign Exchange Committee

      Singapore – The Singapore Foreign Exchange Market Committee

      South Africa – South African Foreign Exchange Committee

      South Korea – Seoul Foreign Exchange Committee

      Switzerland – Swiss Foreign Exchange Committee

      United Kingdom – Foreign Exchange Joint Standing Committee

      United States – Foreign Exchange Committee

      Associate Members representing jurisdictions which meet some but not all of the membership criteria include:

      Georgia

      Indonesia – Indonesian Foreign Exchange Market Committee

      Israel


    • #112615 Reply
      Rinku Das (Hazra)
      Guest

      Reserve Bank of lndia

      STATEMENT OF COMMITMENT TO THE FX GLOBAL CODE

      Reserve Bank of lndia has reviewed the content of the FX Global Code (“Code”) and
      acknowledges that the Code represents a set of principles generally recognised as good
      practice in the wholesale foreign exchange market (“FX Market”). The Bank confirms that
      it acts as a Market Participant as defined by the Code and is committed to conducting its
      FX Market activities (“Activities”) in a manner consistent with the principles of the Code.
      To this end, it has taken appropriate steps, based on the size and complexity of its
      Activities, and the nature of its engagement in the FX Market, to align its Activities with
      the principles of the Code.

      (M. Rajeshwar Rao)
      Executive Director
      Reserve Bank of lndia
      Date: April 18,2019


    • #112616 Reply
      Rinku Das (Hazra)
      Guest

      Bank of Israel
      Market Operations Department

      The Bank of Israel commits to the FX Global Code and has established a Domestic Foreign Exchange Committee

      The Bank of Israel has renewed the Statement of Commitment to the FX Global Code (“Code”),
      thereby demonstrating that it is committed to adhering to the principles of this Code when acting
      as a market participant in the FX market and that its internal practices are aligned with the
      principles of the Code.

      Published in May 2017, the Code outlines principles of good practice developed by central
      banks and private sector market participants of the global foreign exchange market.
      Furthermore, the Bank of Israel has established a Domestic Foreign Exchange Committee in
      Israel. The Israel Foreign Exchange Committee is intended to be a forum of banks and other
      foreign exchange market participants in Israel as well as the Bank of Israel. The aim of the
      forum is to continue to develop the domestic FX market and to promote the FX Global Code.
      The Bank of Israel initially signed the Statement of Commitment to the FX Global Code in
      December 2018.

      Statement of Commitment to the FX Global Code

      The Bank of Israel (“institution”) has reviewed the content of the FX Global Code (“Code”)
      and acknowledges that the Code represents a set of principles generally recognized as good
      practice in the wholesale foreign exchange market (“FX Market”). The Institution confirms that
      it acts as a Market Participant as defined by the Code, and is committed to conducting its FX
      Market activities (“Activities”) in a manner consistent with the principles of the Code. To this
      end, the institution has taken appropriate steps, based on the size and complexity of its
      Activities, and the nature of its engagement in the FX Market, to align its Activities with the
      principles of the Code.

      Bank of Israel
      11th August 2022

      14th Av 5782

    • #112617 Reply
      Rinku Das (Hazra)
      Guest

      CENTRAL BANK OF THE RUSSIAN FEDERATION (BANK OF RUSSIA)
      12, Neglinnaya St.,
      107016, Moscow,

      Russian Federation
      http://www.cbr.ru
      Tel. (7-495) 771-40-46
      Fax. (7-495) 621-91-47

      STATEMENT OF COMMITMENT TO THE FX GLOBAL CODE

      Central Bank of the Russian Federation (Bank of Russia) has reviewed the content of the FX Global Code (“Code”) and acknowledges that the Code represents a set of principles generally recognised as good practice in the wholesale foreign exchange market (“FX Market”). Bank of Russia confirms that it acts as a Market Participant as defined by the Code, and is committed to conducting its FX Market activities (“Activities”) in a manner consistent with the principles of the Code. To this end, Bank of Russia has taken appropriate steps, based on the size and complexity of its Activities, and the nature of its engagement in the FX Market, to align its Activities with the principles of the Code.

      15 January 2021 Bank of Russia

    • #112618 Reply
      Rinku Das (Hazra)
      Guest

      Central bank Governors welcome global code of conduct for currency markets

      Press release | 25 May 2017

      The Governors of the Global Economy Meeting welcome the publication of the FX Global Code, a single global code for the wholesale foreign exchange market, as well as the establishment of the Global Foreign Exchange Committee to maintain the Code in the future.

      This represents the culmination of a two-year collaborative initiative between central banks and private sector market participants from across the globe. The Code is voluntary and covers important areas including ethics, governance, execution, information-sharing, risk management and compliance as well as confirmation and settlement.1

      “The FX Global Code sets good practices for market participants to follow and will support a robust, fair and transparent market, underpinned by high ethical standards,” said GEM Chair Agustín Carstens, Governor of the Bank of Mexico.

      Central banks are strongly committed to supporting and promoting adherence to the Code. They confirm that they intend to adhere to the principles of the Code, and will expect the same of their regular FX counterparties, except where this would inhibit the discharge of their policy functions. Additionally, members of central bank sponsored foreign exchange committees will be expected to adhere to the Code.

      Governors encourage market participants to evolve their practices to be consistent with the principles of the Code and to demonstrate their commitment by using the Statement of Commitment that was also published today. They also encourage the private sector, including associations and infrastructure providers, to raise awareness of the Code and to develop and establish mechanisms to support its adoption.


      1 The Code does not impose legal or regulatory obligations on market participants or substitute for regulation, but rather is intended to supplement local laws, rules and regulation by identifying global good practices and processes.


      BIS Resource

    • #112619 Reply
      Rinku Das (Hazra)
      Guest

      The Global Economy Meeting(BIS)

      The Global Economy Meeting (GEM) comprises the Governors of 30 BIS member central banks in major advanced and emerging market economies that account for about four fifths of global GDP. The Governors of another 22 central banks attend the GEM as observers.

      Chaired by Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, the GEM has two main roles:

      monitoring and assessing developments, risks and opportunities in the world economy and the global financial system
      providing guidance to three Basel-based central bank committees: the Committee on the Global Financial System, the BIS Committee on Payments and Market Infrastructures and the Markets Committee
      The GEM’s economic discussions focus on current macroeconomic and financial developments in major advanced and emerging market economies.

      GEM members: central bank Governors of Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea, Malaysia, Mexico, the Netherlands, Poland, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Thailand, Turkey and the United Kingdom, and the President of the ECB, the Chair of the Federal Reserve Board of Governors and the President of the Federal Reserve Bank of New York.

      GEM observers: central bank Governors of Algeria, Austria, Chile, Colombia, the Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Israel, Kuwait, Luxembourg, Morocco, New Zealand, Norway, Peru, the Philippines, Portugal, Romania, the United Arab Emirates and Vietnam.

    • #112620 Reply
      Rinku Das (Hazra)
      Guest

      The Basel Process – meetings (BIS)

      SHIVA LINGAM

      The BIS fosters discussion and facilitates collaboration among financial and monetary officials by organising and hosting bimonthly and other meetings of officials from central banks and supervisory authorities.

      Bimonthly meetings

      Governors and other senior officials of BIS member central banks hold bimonthly meetings, usually in Basel, to discuss current developments and the outlook for the world economy and financial markets. They also exchange views and experiences on issues of interest to central banks.

      Other meetings of Governors

      The Group of Central Bank Governors and Heads of Supervision (GHOS) is a high-level forum responsible for international collaboration on banking supervision. Chaired by François Villeroy de Galhau, Governor of the Bank of France, the GHOS meets periodically to decide on global banking regulations and oversee the work of the Basel Committee on Banking Supervision.

      The central bank Governors of major emerging market economies meet three times a year to discuss issues of importance to their economies. Regular meetings are also held for the Governors of central banks in small open economies.

      For senior central bank officials, the Bank organises various meetings to which other financial authorities, and occasionally the private financial sector and the academic community, are invited to contribute. These meetings include:

      -annual meetings of the working parties on monetary policy, held in Basel but also hosted at a regional level by central banks in Asia, central and eastern Europe, and Latin America
      -the meeting of Deputy Governors of emerging market economies
      -high-level meetings organised by the Financial Stability Institute for Governors and Deputy Governors and heads of supervisory authorities.

      The Bank also regularly organises informal discussions among public and private sector representatives that focus on their shared interests in promoting a sound and well functioning international financial system.

      https://advocatetanmoy.com/2020/10/22/basel-committee-charter/

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