Transcript of Question & Answer Session FX Global Code

Morning, Mr Debelle. There's one question right now coming from the audience, and it is has the GFXC done any QIS on benchmark reference rate replacement?

There is material in the Code on benchmark rates, on benchmarks, generally. One of the other things I had to do for my sins a few years back was with Paul Fisher, do the review of benchmark FX rates, about five years ago. And partly because it was five years ago, that is going to be a major topic of discussion at the GFXC meeting in December in Sydney this year. Over the coming quarter or so, that is going to be another area that we are going to get feedback from market participants as to the issues they see around benchmark rates, making it four or five years on now since the reforms to the benchmark rates. That is an exercise we're actually about to undertake over the second half of this year, actually, so a very timely question, thanks.

Are there any more questions from the audience? There's one coming up.

My question is do you have any monitoring mechanism to see how this voluntary code is being practised in reality? Is there any monitoring mechanism other than people self-reporting?

The answer to that question partly depends on what jurisdiction you're in. In my jurisdiction in Australia, our securities regulator, ASIC, has targeted reviews on various aspects of the Code and how market participants are implementing them. As I mentioned a few minutes ago, the FCA has just endorsed the Global Code, and that will be part of its senior managers' regime as well, so that provides a degree of monitoring. We, as the Global Foreign Exchange Committee, don't do that, and aren't in the business of explicitly monitoring adherence, but what we do do is have those discussions which take place at the local Foreign Exchange Committees as a general sense, as to whether people are just paying lip service to the Code or whether it is making material change in market conduct.

And I suppose the final aspect where we do do some of that, actually, is at our annual survey of market participants. We very much ask people's opinion as to whether it has had a noticeable impact on behaviour in the market and over the last couple of years since it's been in place, generally, the response has been fairly positive.

Any other questions? I have one, Mr Debelle, and I know for your particular tenure, you're going to be focusing on just how technology's transforming the FX market right now. And so everything is getting mechanised and automated, and I just want to know with markets going in that direction, how does the Committee plan to ensure any kind of conduct risk that it's being managed by all the parties that's participating in the market?

So we actually already have something. We have Principle 34, actually, is about technology risk and calls out algos, and so that talks about that as well. Principle 18 which is directed at the providers of algos and makes clear that clients using the algos need to be constantly evaluating them and also the providers of the algos, we provide guidance on what they should be disclosing about how they work. So I suppose to a reasonable extent, I think that's already addressed in the Code. It was a reasonable issue when we were drafting the Code a few years ago. It does partly come down to this issue I was talking about earlier as to who bears responsibility for particular behaviours in the market, which I think is going to be an area of focus in the review. So particularly when it comes to anonymous trading? Is it the prime broker? Is it the platform? Or is it the counterpart? Who has that responsibility to ensure the appropriate behaviour? Be it manual trading or automated trading.

Any other questions? I think we're good to go. Thank you, Mr Debelle. I really appreciate your time today. If there's no other question, I think we could wrap it up. Thank you.

Okay. Thanks very much. Good night.