FCA recognize FX Global conduct code and UK Money Markets Code
FCA recognize FX Global conduct code along with UK Money Markets Code after thorough consultation that took place in December 2018.
The UK Money Markets Code is a voluntary code written by market participants and published on 26 April 2017.
The FX Global Code is a set of global principles of good practice in the Forex 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 central banks in collaboration with market participants and maintained and updated by the Global Foreign Exchange Committee.
The FX Global Code promotes a robust, fair, liquid, open, and appropriately transparent market. It not impose legal or regulatory obligations on market participants and does not work as a substitute for regulation. The FX Global Code is more to serve as a supplement to any and all local laws, rules, and regulations by identifying global good practices and processes.
It is worth to mention, that although FCA recognize FX Global conduct code, it will not take action based solely on a breach of provisions in market codes (recognized or not). Both the aforementioned codes will be recognized for 3 years. If FCA finds that the codes no longer represent proper standards, the regulator will withdraw recognition before the end of the recognition period.
FCA about Senior Managers and Certification Regime (SM&CR)
As media reports, despite FCA recognize FX Global conduct code, the SM&CR rules do not change because of that.
According to the official FCA note, individuals subject to the Senior Managers and Certification Regime (SM&CR) need to meet the requirements for market conduct, for both regulated and unregulated activities. The aim of the regime is to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence. Behavior that complies with FCA recognized FX Global conduct code will tend to indicate whether individuals are meeting their obligation according to SM&CR rules.
Notable, the FCA will not supervise firms or individuals directly against FX Global conduct and UK Money Markets codes in unregulated markets. The British will not take action based solely on a breach of provisions in market codes (recognized or not).
Both codes may be used as evidence and relied upon in determining what proper standards are, or were believed to be, at the relevant time. Although FCA recognize FX Global conduct code it does not change the regulator’s enforcement approach.
The regulator stressed, that the recognition of both codes is not a new basis for enforcement and does not enhance the FCA’s ability to take enforcement action.
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