ACI FMA teams with Interarab Cambist Association for FX Global Code

ACI – The Financial Markets Association (ACI FMA), has teamed up with the Interarab Cambist Association (ICA) to promote the FX Global Code amongst financial institutions in the Middle East and Africa.

The ICA is a trade association representing professionals working at banks and financial institutions across the Middle East and Africa. Established in 1972, it has members in 15 countries and provides training and workshops relating to asset classes including FX, interest rate products, equities and commodities.

The partnership forms part of the ACI FMA’s goal of strengthening engagement with professionals and institutions in emerging and developing markets. As part of the collaboration, the ACI FMA and the ICA recently combined their annual member conferences – the ACI World Congress and ICA Annual Conference – for the first time in Cairo, Egypt, under the theme “Together Towards Tomorrow”. Over 500 economic experts and financial markets professionals participated in the conference between 25-27 October, making it one of the most high-profile events in the region in 2018.

Rui Correia, Director of Education at ACI FMA, commented: “We are very pleased to build on our cooperation with the Interarab Cambist Association. The Middle East and Africa are amongst the fastest-growing developing markets for FX trading, with countries such as South Africa and United Arab Emirates emerging as key regional trading hubs.

“The launch of the FX Global Code offers a unique opportunity to ensure the all FX market professionals adopt universal standards of ethics, conduct and behaviour. This partnership is an important step in raising awareness of the FX Global Code and promoting adherence.”

The ACI FMA will be hosting a webinar entitled ‘FX Global Code – Education and Adherence’ on the 14 November. It features representatives from the European Central Bank, BBVA, Refinitiv and ING Bank. For more details and to register, please click here.

First Year of the FX Global Code in Review

On 25 May 2017, the FX Global Code of Conduct was launched to promote the integrity and effective functioning of the wholesale foreign exchange (FX) market.

One year on, nearly 200 firms, ranging from central banks to algorithmic trading providers and ECNs, have signed statements of commitment to the Code.

Despite the deadline for signing ups passing on 25 May 2018, there are still institutions that are yet to sign up the Code and thus, a long way to go before it achieves widespread adoption.


Spot FX platform, ParFX, was one of the first to sign up to the Global FX Code. The exchange’s principles of transparency, fairness and equality align with those of the Code’s, making signing up a no brainer. Talking to Markets Media, COO Roger Rutherford stated that the Code was the best method to correct the industry’s reputation, “the alternative could have been more regulation which takes time and introduces further costs to the industry. So whilst the market is adjusting to MiFID II, a code of conduct is a better way to bring ethics back into the FX marketplace.”

Moving forward, Rutherford believes institutions shouldn’t immediately be penalised for having not signed up. “For now, an institution could probably make a good case for why they haven’t done so yet because they are waiting for the final details on last look, anonymous trading and cover-and-deal to be decided by the working groups.” However, Rutherford added we can expect to see central banks refusing to do businesses with those who haven’t signed up to the code.


The ACI FMA is a trade association which represents over 9,000 financial markets professionals. The ACI was the first to set an industry standard in the 1970s with its ‘Model Code’, which was retired upon the launch of the FX Global Code last year. As a strong believer in setting an ethical standard, the ACI has supported the launch of the Code with its ELAC portal, an online platform which provides FX professionals with continuous training and certification. It also offers an online version of the FX Global Code Certificate which formally tests an individual’s understanding of the Code’s 55 principles.

Looking beyond the first year of the code, Paul Chappell director of education at the ACI Financial Markets Association, believes the industry has more room for improvement in relation to adoption of the code. “There are elements of the code – particularly around pre-hedging as well as last look – that demand a significant cultural shift and some large market participants have a long way to go in this respect,” he says.


Pragma is one of the leading algorithmic trading technology providers in the FX and equities market. The company recently made headlines with its statement of commitment to the Global FX Code. Pragma believes algorithmic technology lends itself to aiding traders with their transparency requirements, as each transaction is databased and therefore easy to analyse.

A less successful part of the Code is the rate at which buy-side institutions have signed up to the code. “If you look at the public registers, there are certainly fewer buy-side participants that have signed up to the code. I think there is a sense that the code was pointed towards the sell side, because that is where the bad behavior in the FX market was uncovered, therefore the buy side feels less urgency to sign up,” according to Curtis Pfeiffer, Chief Business Officer at Pragma Securities.

Looking forward, Pfeiffer believes that corporate treasurers will have a key role in the success of the Code. “For a corporate treasurer to now commit to the Code sends a public message to its service providers – banks, brokers and vendors – of the behaviour it expects from them. Doing so opens and encourages new ways of doing business, and advocates for greater use of algorithmic trading and TCA [transaction cost analysis].”

What to look for next year

It is clear that the Code is the first step in a long journey the FX market is taking to improve its reputation. To reach full effectiveness there needs to be unanimous adoption across the industry. There will need to be a further push to get market participants such as buy-side and corporate treasurers to commit to the Code. On the other hand, there are aspects of the Code such as last look, anonymous trading and cover-and-deal, that will need to be developed before some institutions commit.

It will be interesting to see how the FX Global Code evolves after its deadline and if, following the outcome of the three working groups, it continues to see the same critical mass it has experienced in the first half of 2018

ACI FMA launches ACI Online FX Global Code Exam

How does a FX market participant show adherence to the FX Global Code?

ACI Financial Markets Association (ACI FMA), the trade association which represents around 9,000 financial market professionals, is launching a new online version of the FX Global Code Certificate on 25 May 2018.

The 60-minute online exam certifies that market participants throughout the industry have taken the step towards demonstrating adherence and knowledge of the FX Global Code.

It assesses an individual’s understanding of the Code’s six themes and 55 principles – testing practical application of aligned best market practices.

Bruno Langfritz, Chair of the Management Board at ACI Financial Markets Association, said: “The ACI Online FX Global Code Exam, for the first time, enables individuals who wish to show they adhere to the FX Global Code easy access to a tool that demonstrates they understand the principles involved and can be taken anywhere on your computer.”

Paul Chappell, director of education at the ACI, added: “It was recognised there was an urgent need for people to have a more straightforward method of adhering to the Global Code of Conduct, and a facility whereby they could take an examination and get certification straight away,” says Paul Chappell, director of education at the ACI.

The certificate complements the increasingly popular ELAC Portal, which provides step-by-step professional development for those looking to prove their adherence to the Global Code via Questions and real-life Scenarios.

“How does one of the large banks know what they are doing is appropriate and in concert with what is happening with the rest of the industry?” asks Chappell.

“This is why having an examination and our Elac online learning facility, independently run and administered by ACI, allows large organisations with their own in-house training to benchmark themselves against the industry and not just their in-house competencies,” he adds.

With the one year anniversary of the FX code on the same day of the launch of the exam, all eyes will be on the FX industry to show how the code has tackled the problem of trust, and how exactly the code will develop moving forward.

Adherence to FX Global Code will reform conduct and behaviour

As we near the final stages of the development of the foreign exchange (FX) Global Code, the ACI Financial Markets Association (ACIFMA) is leading efforts to support education and adherence. We will start by making commitment to the Code mandatory for ACIFMA members, and encourage members to prove their adherence in future. This could prove to be a turning point in reforming conduct and behaviour in foreign exchange, writes Brigid Taylor in FX Week.

As a member of the MPG, ACIFMA has both contributed and witnessed the extent to which market participants and policymakers have engaged, discussed, debated and worked together in the best interests of the wider market. This is an industry that transacts more than USD5 trillion of currencies across borders every single day. Its ability to operate smoothly is crucial to the international economy.

There was of course a broad range of views on how best to address a series of topics, such as governance, information sharing, last look and pre-hedging. An array of views is expected in any large consultation, but consensus has been achieved with the best interests of the market in mind.

The final Code will, in my view, outline principles and guidance that is effective, appropriate and strike the right balance. I expect it to act as an essential reference for market participants when conducting business in the wholesale FX markets and when developing and reviewing internal procedures.

Hardwiring adherence – the third objective

This brings us to the final objective set out at the beginning of the process: develop proposals to promote and incentivise adherence to the Code.

For this to happen, it is essential that individuals (i) commit to adhering to the Code; (ii) receive the appropriate training and education so they are clear on what is expected and understand how to comply; and (iii) sign up to a solution where senior managers are able to observe and address any training and educational gaps amongst their subordinates.

This is where the ACI Financial Markets Association (ACIFMA) can play a central role. With a track record in delivering training, education, attestation and best practice principles that stretches back more than half a century, we represent more than 9000 individuals in 60+ countries.

There are several ways we intend to achieve this. Firstly, we will make it a prerequisite for individuals to commit to adhering to the FX Global Code as part of their membership. This means a meaningful proportion of the market – over 9,000 FX professionals around the world – will sign up immediately after the code is launched and commit to understanding, implementing and abiding by the new principles.

There is an urgent need to restore ethics in financial markets and the FX market is aware of its responsibilities to its clients and stakeholders. The significance of the enormous effort undertaken over the past three years should not be underestimated; to date, the level of leadership and engagement has been exemplary. I expect the FX Global Code to be a turning point in reforming conduct and behaviour in foreign exchange and develop a renewed sense of trust in this important sector of any economy.

To read the full article by Brigid, please visit the FX Week website here.

President of the ACI, Marshall Bailey responds to FEMR

Marshall Bailey, President, ACI Financial Markets Association:


“We welcome the recommendations set out in the Fair and Effective Markets Review (FEMR), which sets the foundation for positive change in the Fixed Income, Currency and Commodities (FICC) markets – particularly at a time when the issue of individual conduct and ethics in FICC markets is very much in the public eye.


“From our perspective, the most important takeaway from this is that the FEMR will lead to an increased emphasis on financial education on ethics and industry-wide training as well as the adoption of a single code of conduct for Foreign Exchange to raise standards and accountability. Regulators are rightly stepping up efforts to tackle trader misbehaviour and place conduct at the heart of their reforms. The importance of this cannot be over-emphasised. The financial services industry employs millions of people globally, and the sector has been tarnished by the actions of a small minority acting in an unethical manner. Where they are guilty of misbehaviour, we need to make individuals accountable, but let’s also assist and support those seeking to improve the industry to do so.


“Today’s report also makes clear that measuring and monitoring progress is central to behavioural change. It is clear that in some situations individuals receive little or no training or practical guidance, leading to uncertainty about what is and isn’t acceptable. Positive progress has already been made on the enforcement front, but to achieve sustainable change, we must go further and embed high standards of conduct and practices within organisations. This can be done through education, and by monitoring individual behaviour to ensure individuals at all levels – from the most junior ranks up to senior management at board level – acknowledge and abide by an enforceable code of conduct.


“Initiatives like the ACI’s Code of Conduct and e-learning and certification (ELAC) Portal provide this critical service to organisations and individuals alike. The Model Code articulates in great detail how ethical conduct should be taught and monitored, and together with our ELAC portal, can help to reduce conduct risk, monitor behaviour and ensure any knowledge gaps are swiftly addressed by supervisors. This proactive approach to self-regulation is exactly the type of cultural shift regulators are seeking to achieve with these reforms. We are working closely with the many entities focused on ethical conduct and codes, and believe that a common solution can be found and most easily adhered to.


“In addition, ensuring the universal application of a code of conduct across borders will be vital to changing behaviour and ensuring all participants and institutions are clear on what is and isn’t acceptable behaviour. If necessary, it must be backed up by law and embedded within national financial regulations to guarantee strong enforcement. I believe we need to look to bodies likes the Financial Stability Board, chaired by Bank of England Governor Mark Carney, or the Bank for International Settlements in Basel, which has already begun excellent work to harmonise international codes, to drive this further.


“Levelling the playing field internationally in this way will provide much needed clarity and reduce opportunities for ethical arbitrage. It is also beneficial for regulators, as they can measure the behaviour, ethics and conduct of all participants by the same criteria – regardless of geographical location – and any misdemeanours can be immediately identified and addressed.”


Comments on last look


“The reality is that customer preferences vary – and ‘last look’ can, at times, be an acceptable and effective form of execution. For example, some might prefer as tight a price as possible, accepting a potentially higher rejection rate through ‘last look,’ whilst others might prefer certainty of execution at a different price.


“However, participants should take steps to ensure that provision of ‘last look’ liquidity does not create a false impression of market levels or depth. Under no circumstances should orders with ‘last look’ be placed for the purpose of price discovery and with no intention to trade, and use of electronic algorithms solely to accept trades that are favourable, and reject non-favourable deals when the criteria for assessing are equal, should be avoided completely.


“The onus is on dealers employing ‘last look’ to be fully transparent and ensure customers are made aware that the practice is in use, the subsequent consequences are explained and that accurate records are kept on fill-and-reject ratios to demonstrate compliance. Having been fully apprised of the pros and cons of ‘last look’, customers should be in a position to decide to trade or not using “last look” pricing, in line with their own requirements and execution style.


“The ACI’s Model Code provides clear guidance on how ’last look’ practices should be used by liquidity providers and the information that must be provided to customers in order to maintain a transparent and fair operation.”



About ACI – Financial Markets Association


ACI – Financial Markets Association is a leading non-profit, non-political association of wholesale financial market professionals. Members of ACI are in a large part engaged in professional trading, broking, operations, regulatory and compliance activities in foreign exchange, money fixed income and derivatives markets.


ACI was founded in Paris in 1955 as Association Cambiste Internationale and has a proud and illustrious history of involvement in helping its membership through various market iterations/interactions.


ACI currently counts some 13,000 international members from more than 60 countries, with growing interest globally.


Statement from the ACI Financial Markets Association on the US DoJ announcement in relation to the FX market on 20 May 2015.




20/05/2015: Statement from the ACI financial markets association, in relation to the US Department of Justice announcement in relation to the FX market on 20 May 2015.



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.

ACI reaction to FSB paper on FX benchmarks

Marshall Bailey, President, ACI International comments:


“We have consistently argued it is not the fix that is broken, but rather it is the manner in which it is used by certain market participants that must be scrutinised. Technology advances can bring tremendous opportunity for the fixing orders to evolve into true transaction cost analysis tools that will benefit fund managers and the clients for whom they manage assets. Ultimately, the widespread use of the fix has been to benchmark performance of FX managers. A central utility may facilitate this improvement, but there is a risk of further complacency on the part of asset managers to prove their own alpha-generation if the central fixing utility draws in more volume.


“The use of a central utility, such as the ones proving CCP benefits to the market currently, must be well governed and capitalised, with the risks understood. The unintended consequences of further concentration of FX flows may not be what the regulators and supervisors want. We would have to be careful in the formation of such a utility, and ensure that all parties understood their role and their obligations.


“In all cases in markets, ultimately it comes down to the behaviour of individual market participants, and the ability of their supervisors to enforce high standards through effective oversight and governance. We welcome clarity on the current concerns in order that the market can benefit from the leadership guidance provided on matters of ethical conduct in wholesale financial markets.”


Marshall Bailey, ACI President, makes the case for a global code of conduct across financial markets on BBC Radio 4


The ongoing investigation into alleged misconduct in the FX markets has put the industry in the spotlight once again, with George Osborne set to announce tougher regulations for foreign exchange.


Marshall Bailey, President of the ACI,  speaks to BBC Radio 4 about the forex probe and how a global set of standards such as the ACI’s Model Code can ensure ethical behaviour and best practice in the markets. Listen here.