We asked Roger Rutherford, COO of ParFX and a member of the ACI FX Committee who has been involved in the establishment of the Code from the outset, to tell us more about this initiative and to provide an update on the working groups the GFXC has created to focus on four priority areas: “cover and deal” trading activity, disclosures, buy-side outreach, and integration of the Code in the FX market.
“The report is an accurate reflection of the bouts of higher volatility in both major and emerging market currencies, with the 17 per cent rise in Chinese yuan turnover testament to this,” said Roger Rutherford, chief operating officer at trading platform, ParFX.
Roger Rutherford, chief operating officer of ParFX, said in an email: “It’s no surprise to see an overall fall in FX turnover reported by the FXJSC, but the variations across different instruments make for interesting reading.”
Commenting on the survey, Roger Rutherford, COO of ParFX, says, “It’s no surprise to see an overall fall in FX turnover reported by the FXJSC, but the variations across different instruments make for interesting reading. For example, the rise in FX spot activity is at its highest since April 2015, with the survey revealing a significant year-on-year increase of 11%. This trend is also reflected in data released by the New York Federal Reserve.”
A well-functioning foreign exchange (forex) market is important to central banks in ensuring the effective transmission of monetary policy to the real economy and to support price stability. Guy Debelle, deputy governor of the Reserve Bank of Australia, referred to it as “one of the most vital parts of the financial plumbing” in his opening remarks at the FX Global Code of Conduct launch.
Despite room for improvement, ParFX COO Roger Rutherford reckons FX credit and risk management processes have been transformed over the last decade and that adoption of electronic trading, growth of algorithms, proliferation of trading venues and greater number of counterparties have all had an impact on the way credit is allocated and managed.
“But whether or not there is a move towards spot FX, this will have no impact on options or non-deliverable forwards (NDFs),” Roger Rutherford, chief operating officer of Tradition-owned FX trading venue ParFX, told FOW.
“It’s clear that market participants still have some key concerns relating to disclosures, behaviour in anonymous trading environments, and a lack of trading transparency," Roger Rutherford, chief operating officer of Tradition-owned FX trading platform ParFX, said.
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As the number of market participants adopting the FX Global Code of Conduct gathers momentum in 2019, there will be a greater focus on the transparency of trading practices, says Roger Rutherford, chief operating officer at trading venue ParFX.