The FX Market features a diverse set of participants who engage in the market in different ways and across various FX products. 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 Market, including sell-side and buy-side entities, non-bank liquidity providers, operators of E-Trading Platforms, and other entities providing brokerage, execution, and settlement services. While there can be no universal “one size fits all” approach, given the diversity of the market, the Global Code is intended to establish a common set of guidelines for responsible participation in the market.
For the purposes of this register, a “Market Participant” is a person or organisation (regardless of legal form) that:
- is active in FX Markets as a regular part of its business and is engaged in the activity of the purchase or sale of one currency against another, or in transactions designed to result in gains or losses based upon the change in one or more FX rates, such as derivatives, whether deliverable or non-deliverable, either directly or indirectly through other market participants; or
- operates a facility, system, platform, or organisation through which participants have the ability to execute the type of transactions described in (1); or
- provides FX benchmark execution services; and
- is not considered a retail market participant in the relevant jurisdiction(s).
The term includes any personnel who conduct the foregoing on behalf of a Market Participant.
As a guide, the following types of persons or organisations would generally be expected to engage in FX Market activities as Market Participants, as described in 1 – 4 above:
- Affirmation and/or settlement platform
- Asset manager
- Broker or investment adviser
- Central bank
- Corporate treasury department
- E-trading platform
- Government agency
- Hedge fund
- Infrastructure or technology provider
- Insurance company
- Non-bank liquidity provider
- Pension fund
- Quasi-sovereign or supranational institution
- Sovereign wealth fund
Any entity classified as an FX Market Participant in the relevant jurisdiction(s).
The universe of Market Participants is diverse in the type and level of engagement in the FX Market. The Global Code is expected to apply to all of these Market Participants, but the details of how it may apply can depend on their underlying activities. In practice, the steps that different Market Participants take to align their activities with the principles of the Global Code will reflect the size and complexity of the Market Participant’s FX Market activities, and the nature of the Market Participant’s engagement in the FX Market, and will take account of the law of their jurisdiction. Ultimately, the decision of what steps should be undertaken, and in what manner, resides with each Market Participant, reflecting an appropriate internal assessment.