Bank of England urges FX buy-side to sign Global Code of Conduct

Tuesday, December 18th, 2018

The Bank of England’s Executive Director for Markets, Andrew Hauser, urged traders on the FX buy-side to sign up to the Global Code of Conduct as he addressed The Finance Hive’s annual FX London meeting on Thursday 6th December.

Speaking at the event, Andrew commented, “That relentless push to innovate is one of the great strengths of the global FX markets, and it is a privilege to be part of that conversation”.

Discussing the importance of collaboration across the buy-side at events such as the Annual FX Meeting, Andrew added: “At a time when FX markets are evolving rapidly, there has never been a more important time for investors active in those markets – all of you – to be shaping, and adopting, the norms, conventions and standards embodied in the Code.” He went on to state that leaving the maintenance of industry standards to others, such as the sell-side, would not serve the buy-side’s interests – or those of investors.

The meeting brought representatives of 85 of the leading names in the buy-side community – including Allianz Global Investors, Fidelity, Goldman Sachs Asset Management, AXA Investment Managers, Prudential and Vanguard among others – for a frank and open discussion, where Chatham House rules applied. Given the urgent need for these firms to embrace the Code, such openness was both welcomed and constructive.

Attendees took part in several roundtable discussions throughout the day, covering a broad cross-section of relevant topics. Key talking points included:

  1. Algos. While not new to the industry, there is still a divide between those who love and hate them. The balance between taking a ‘leap of faith’ to algorithmic trading and maintaining control with human interaction was much debated – but the importance of analysing and learning from each trade is always essential.
  2. Data. Its usefulness is undisputed – but to get true insight, a wide spread of trades is needed. This is where peer-to-peer interaction becomes important, but is so much transparency giving too much away to competitors?
  3. Transparency. Again, this divided opinion between Hive buy side members, with some feeling that transparency is a positive progression in the industry, and others feeling that it could kill competition.
  4. Liquidity options are changing.  It’s crucial to develop methods on how to evaluate and have the tools to validate. At present, the buy-side are happy to let custodians do FX – but it is time to assess whether there is a better way.

Julie Nicolas, Managing Director, the Finance Hive, commented at the meeting: “Andrew Hauser’s speech reiterated what we at the Finance Hive have long believed: that it’s vital for the buy-side to have a voice in the industry and an opportunity to come together to discuss the issues that affect them. The Finance Hive is an important step towards this, creating a collaborative environment where FX buy-side professionals can debate peer-to-peer trading, liquidity, regulations, and identify necessary next steps as a community.”

About The Finance Hive

The Finance Hive supports the global FX trading community, providing a platform to enable the most senior and innovative FX trading professionals globally to respond to industry issues, successfully engage with regulators, and share knowledge, common market structure and liquidity challenges. 

The objective is to gather brilliant minds and to create ground-breaking content.  The Finance Hive hold meetings and networking dinners in London, New York and Singapore, attended by companies including BlackRock, UBS Asset Management, Aviva Investors, AHL, Schroders, Invesco, Eaton Vance, MFS Investors, PIMCO, Fidelity Investments, StateStreet Global Advisors.

What our members say about The Finance Hive:

“I take the opportunity to thank you for your stellar performance on the organisation of these events. You made me better professionally due to quality of the noble assembly.” Ostrum

“It is hard work and intense, but my favourite event of the year.” State Street global Advisors

“The Hive’s concept is invaluable.” UBS Asset Management

“Attendees are very open and it is easier to share views with the roundtable format.” T. Rowe Price

“It was a real pleasure to participate and speak at the Hive event. I appreciated the frank discussions and the diversity of the buy-side community present.” Banque de France

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