ASIC reports Wholesale FX practices in Australia
ASIC has released a report on the Wholesale FX practices in Australia, summarising its work in wholesale foreign exchange (FX) markets during 2018 and 2019. The report highlights the observations of better practices and some poor practices used by participants operating in the market.
This work included various onsite and thematic reviews of participants, as well as monitoring ANZ Banking Group, Citigroup, Commonwealth Bank of Australia, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Macquarie, National Australia Bank, Royal Bank of Canada, UBS, Westpac Banking Corporation compliance with the requirements under their respective FX Court Enforceable Undertakings.
The report provides ASIC’s observations in the areas of: governance and supervision, FX mark-ups, last look, handling confidential client order information, surveillance and monitoring, staff training on conduct risk, staff personal training. Participants should review these observations and practices and consider how the better practices may be applied in their own FX businesses to enhance their approach to managing conduct risk.
FX is a key global market and is of systemic importance to the Australian economy. To function effectively, the FX market relies on participants to act with integrity and fairness. As of April 2019, total global FX volume was around USD6.6 trillion per day, and the Australian dollar is the fifth most traded currency in the world.
ASIC Commissioner Cathie Armour said, “As a market and conduct regulator, ASIC has been enhancing our oversight of FICC markets, and has been very active in our surveillance and enforcement of conduct in the FX market. We are pleased to see widespread adoption of the FX Global Code but there are still areas for improvement.”
You may check the list of the ASIC-Regulated Brokers.