The FX Global Code grounds the industry in principles to maintain a fair and open marketplace. As this code applies to all market players, Devexperts has committed to these principles and maintains that they should be upheld in the development of the technology used in the marketplace as well. Read Devexperts state of commitment here.
What is the FX Global Code?
This set of global principles of good practice in the foreign exchange market (Global Code) has been developed to provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market.
The code created primarily for institutional brokers (e.g. banks, liquidity providers) has no specific requirements for a vendor. However, as a software solutions developer for brokerages and exchanges involved in the FX market, we hold technology to the same standard and commit to creating trading technologies and consulting clients in adherence to these principles.
In Forex, errors made is money lost. Intent is irrelevant. This means that a single human error can cost a brokerage both financially and negatively impact their reputation. By aligning ourselves with the FX Global Code, we ensure that our software solutions can be put to use for Forex players to facilitate our clients in meeting these demands; reducing human error, saving on oversight costs, and securing their reputation.
Take, for example, Principles 9 and 10 regarding execution.
Through technology, these principles are handled automatically. Within our execution platform, we can make sure that all orders are handled electronically and that they are following the rules. Transparency is built-in with order tracking and time stamps. The human element, and therefore human error, is removed.
In Risk Management and compliance, particularly principles 26, 27, and 30, our technology is working for you:
Technology takes the risk out of Risk Management. With our credit engine and risk management system, technology takes care of monitoring the client’s credit and the brokerage’s exposure to their liquidity providers. Brokers can monitor liquidity in real-time to understand their exposure and risks rather than relying on the liquidity provider, avoiding some of the issues we saw during the Swiss National Bank Crisis in 2015.
In operational and technology risks, as outlined in principles 33 and 34,
There is software to facilitate monitoring everything. Even for operational and technology risks. With software solutions, if you have a disaster like losing a data center or network link, the market data can be live in multiple sites. This way, if something fails, another site takes over. When technology is first implemented, these types of risks come as a second thought, but it is important to have recovery and business continuity plans in place using technology. Risks avoided. Crises averted.
And to adhere to further risk management principles such as Principle 50 regarding Settlement Risk, a system can be implemented to monitor exposures so you can act on those potential risks by closing and settling positions.
As well, principle 44 of the FX Global Code calls for the implementation of:
This means, getting away from manual work, implementing straight-through processing. For example: not manually keying from one system to another. With software automation, manual tasks such as this become free from human error.
Money and technology have been flirting for ages and become nearly wed in recent years. With advancements in software solutions, there is no reason for brokerages and exchanges, to not meet the requirements laid out in the Forex Global Code.