Explore how the FX Global Code provides an opportunity for New Zealand FX Providers to re-earn the trust of market participants.
The upheaval of the 2008 Global Financial Crisis shook the public’s trust in the integrity of financial service providers around the world. Governments responded by introducing sweeping regulatory changes in order to rebuild standards of good practice for the financial sector.
International organisations, such as the Bank of International Settlements (BIS), were formed to assist governments in this mission. In May 2017, BIS issued an updated Foreign Exchange (FX) Global Code of Conduct, that was endorsed by New Zealand’s Reserve Bank of New Zealand (RBNZ) and the Financial Markets Authority (FMA).
The Reserve Bank Deputy Governor Grant Spencer said; “The code of conduct applies to both those buying and selling foreign exchange and is a principles-based code rather than a rules-based code”.
The FX Global Code urges FX providers adherence to improve six primary principles:
- Information sharing
- Risk Management and compliance
- Confirmation and settlement processes
The introduction of the FX Global Code is an opportunity for the FX market to re-earn the trust of market participants. New Zealand FX providers can charge a premium for their products because the New Zealand financial market’s brand is trusted around the world.
It is in their interests to keep it that way. See who makes the rules in AML / CFT compliance here in New Zealand.