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Selected versions of the full text of the Global Foreign Exchange Market Guidelines (I)

Writers: central banks F cashback forexex rebate for you private sector getforexrebate highestrebateforex from 16 jurisdictions around the world collaborated rebateforexindonesia the preparation of these guidelines The Bank for International Settlements (BIS) established the Foreign Exchange Working Group (FXWG) under its ForexrebateforyouCommittee in July 2015. The ForeignExchangeWorkingGroup (FXWG), composed of representatives of central banks from 16 countries (regions) around the world, led the preparation of this guideline. By: the Global Foreign Exchange Market Committee (GlobalForeignExchangeCommittee , GFXC), which is jointly composed of 16 national (regional) foreign exchange market committees (FXCommittee) In May 2017, the first meeting of the GFXC was held in London to announce the establishment and release of the Global Foreign Exchange Market Guidelines (initial version in May 2017) In addition, the guidelines will be revised periodically and will continue to promote collaborative improvement Objective: To provide a set of common principles for the wholesale foreign exchange market (FX market), aimed at promoting a robust, fair, open, liquid and moderately transparent market, to promote the integrity and efficient operation of the market Legal effect: This guideline is voluntary to sign and comply with, this guideline does not constitute a legal or regulatory obligation to market Participants constitute legal and regulatory obligations, and not a substitute for regulation This guideline specifies global good practices and processes, and is complementary to relevant national / regional laws and regulations Applicable objects: This guideline should be applicable to all foreign exchange market participants, including buyers and sellers of the market, non-bank liquidity providers, electronic trading platforms, and other brokerage, execution and settlement services providers which Of course, including all kinds of foreign exchange master broker (PB), POP brokers, technical service providers, liquidity providers (LP), etc. Statement of Commitment: that is, compliance with the Global Foreign Exchange Market Guidelines Statement of Commitment (StatementofCommitment) Statement of Commitment has a standardized format, the market participant signed a statement of commitment, that the market participant voluntarily comply with this The following is an example of the statement of commitment signed by the Bank of England: six principles, 55 rules The content of the Global Foreign Exchange Market Guidelines includes six principles, 55 rules: The first principle: ethical market participants should act ethically and professionally to promote the formation of a fair and honest foreign exchange market environment Rule 1: Market participants should strive to meet the highest ethical standards Rule 2: Market participants should Strive to achieve the highest professional standards Rule 3: Market participants should identify and deal with conflicts of interest [Rule 3 refers in detail to the institutions (companies) and their staff and customers to generate a conflict of interest between the situation, the company should be fair to its customers and other market participants, to give up the implementation of acts involving conflicts of interest which, of course, conflict of interest behavior also includes: artificial intentional technical failures, manipulation of quotes The second principle: governance market participants should have a robust and effective governance framework, their participation in the foreign exchange market activities have clear and comprehensive monitoring capabilities to ensure that they can responsibly participate in the foreign exchange market operations Rule 4: market participants of foreign exchange business strategy and the ultimate responsibility for the financial soundness of the organization or individual, should establish a reasonable and effective Market participants should establish reasonable and effective organizational structures and operational mechanisms to enable appropriate oversight, management and control of market participants foreign exchange market conduct. Rule 7: Market participants shall establish appropriate policies and procedures to effectively address and respond to potential misconduct and practices [Rule 7 proposes an internal reporting system in which companies shall clearly communicate to appropriate staff and external parties where concerns about potential misconduct and practices (including, but not limited to, illegal, unethical or questionable conduct and practices) may be reported confidentially, without risk of retaliation by the reporter. However, this internal reporting system will be largely ineffective unless there are high rewards for reporting] The third principle: trade execution market participants should be careful in negotiating and executing transactions to promote a robust, fair, open, liquid and moderately transparent foreign exchange market Rule 8: Market participants should be clear about their roles and responsibilities [Rule 8 refers to two types of customer acceptance Orders: one is the agent (Agent) to execute order transactions, the second is self-employed (Principal) to execute order transactions in the field of retail foreign exchange, the agent to execute orders refers to the STP/ECN type of broker, self-executed orders refer to the market maker (MM or DD) type of broker in the MM model, the broker has the risk of market volatility and credit risk, may can incur significant losses due to market fluctuations and may also generate betting behavior with customers] Rule 9: Market participants shall handle orders fairly and transparently in accordance with their responsibilities [Rule 9 is an addition to Rule 8 and requires that market participants shall handle customer orders fairly and transparently and shall make customers aware of: how orders are handled and traded; factors that may affect execution policies, typically including positions, the whether the market participant managing the customer order itself bears the associated risk, liquidity conditions and market conditions, other customer orders and/or trading strategies that may affect the execution policy; the circumstances in which autonomy may or should exist and how it may be exercised Rule 9 also provides for four different market participant roles self-directed model (Principa)l participants handling customer orders, agent model ( Agent) who handles customer orders, participants who operate electronic trading platforms (FXE-TradingPlatforms), and participants who act as InterdealerBrokers, all of which are defined in detail Electronic Trading Platforms (FXE-TradingPlatforms) are any platform that allows market Participants in the foreign exchange market to execute electronic transactions in the system InterdealerBrokers (InterdealerBrokers) refers to the financial intermediaries that facilitate direct transactions between broker-dealers, trading banks and other non-personal financial institutions] Rule 10: Market participants should handle orders fairly and transparently, taking into account the differences between the different types of orders [Rule 10 refers to the companys handling of Stop-loss orders from customers, pointing out that trading or other actions to induce the market price to the stop-loss level; intentionally creating losses and executing stop-loss orders is unacceptable behavior which is also a common violation of some foreign exchange brokers Rule 10 also clearly mentions collusion information for insider trading, market manipulation and other acts are not acceptable] Rule 11: Market participants can only use the proprietary model Rule 11: Market participants may only hedge the risk of customer orders in advance when using the proprietary model: and must be fair and transparent [Rule 11 mentions that companies executing customer orders in the proprietary model must not infringe on the interests of customers when hedging customer orders and must be open and transparent] Rule 12: Market participants must not request transactions, create orders or provide quotes for the purpose of obstructing the normal operation of the market or impeding the market price discovery process [Rule 12 clearly states that shakedown is an act that impedes the normal functioning of the market] Rule 13: Market participants shall understand how reference prices, including high and low prices, are formed based on their trades and/or orders Rule 14: Market participants using the proprietary model shall have a fair and reasonable markup (MarkUp) policy in customer transactions [Markup is mentioned in Rule 14 as Markup policy that may be factored into the final price of a transaction is also used by many forex brokers in violation of the rules to infringe on the interests of customers through opaque markups Rule 14 advocates disclosure of information related to markups to customers] Rule 15: Market participants should identify and resolve trading differences as soon as possible to maintain the good functioning of the market [Rule 15 explicitly mentions PrimeBrokers ( PrimeBrokers), a prime broker (PB) is an institution that provides credit facilities to one or more trading participants under pre-agreed credit terms and conditions Prime brokers may also provide ancillary or joint products, including business and technical services Prime brokers play a unique role in the identification of credit risk Market participants associated with prime brokers are prime brokerage clients and execution The executingdealer is the execution intermediary (e.g., agent or platform) between the prime broker and its client. In cases where the identity of the client is known, the prime broker client and the executingdealer are responsible for resolving trade differences so that corrective trades can be made and terms matched in a timely manner through the prime broker. Rule 16: Market participants acting as VoiceBrokers should only change counterparties if there are insufficient lines between the parties to the transaction [VoiceBrokers are brokers who use telephone, intercom systems, and/or hybrid solutions to facilitate transactions between dealers]. Forex brokers] Rule 17: Market participants should be transparent and make proper disclosure to their clients when using LastLook LastLook is a practice in electronic trading activities where a market participant receives a trade request for their quote and has the ultimate opportunity to accept or reject the trade request Market participants should be transparent and make proper disclosure to their clients when using LastLook LastLook is a practice in electronic trading activities where a market participant receives a trade request for their quote and has the ultimate opportunity to accept or reject the trade request LastLook is transparent, enabling customers to understand how LastLook applies to their transactions and to make informed decisions] Rule 18: Market participants that provide algorithmic trading or aggregationservices should fully disclose to customers how they operate [Rule The algorithmic trading and aggregation services mentioned in Rule 18 are common in our usual retail foreign exchange transactions. Market participants providing algorithmic trading and aggregation services are required to disclose to their clients: a clear description of their algorithmic trading strategy or aggregation services strategy, with sufficient information to enable clients to evaluate the performance of the services and to properly protect confidential information; whether the algorithmic trading or aggregation services whether the provider of the algorithmic trading or aggregation service adopts a proprietary model for executing transactions; the fees corresponding to the provision of the service; in the case of an algorithmic trading service, general information about the path of the parameters involved in the decision; in the case of an integrated quotation service, information about the sources of liquidity that may be used]

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