The recognition of industry codes for unregulated financial markets and activities by the FCA has started with these two codes.
The Financial Conduct Authority (FCA) made an announcement concerning their recognition of both the FX Global Code and the UK Money Markets Code. The FCA said that they now consider the two codes as part of their codes recognition scheme. The FCA used the recognition of the code scheme to recognize industry codes for unregulated financial markets and activities.
The UK Money Markets Code is part of the Money Markets Committee. The code run by the Money Markets Committee focuses on deposit, repo and securities lending markets in the United Kingdom. After due consultation in December 2018, it was decided that the FCA recognizes the UK Money Markets Code. The rules of the FCA will not change and the two codes that are now recognized by the FCA will need to comply with the Senior Managers and Certification Regime (SM&CR). The rules apply to both regulated and unregulated markets.
FX Global Code
The FX Global Code is run by the Global Foreign Exchange Committee. The code is designed to set guidelines for good practices around the wholesale trading of forex globally. By setting these principles, the code aims to increase the credibility and integrity of the forex markets. A number of firms that engage in forex trading make use of the FX Global Code. The Moscow Exchange and LHC are some of the institutions that adhere to the code.
Firms which make use of the code are expected to offer their staff training about the code and its guidelines. They are also expected to closely monitor their staff and if necessary, discipline them according to the Individual Conduct Rules that are found in the FX Global Code. By so doing, these firms ensure that they and their staff are in full compliance with the code.
The FCA has added the FX Global Code and the UK Money Markets Code to their code recognition scheme and these become the first unregulated codes recognized by the FCA. As more companies are adopting the FX Global Code, the recognition of the code by the FCA will go a long way in ensuring that firms which have adopted the code are more compliant with both the code itself and the FCA.