BoE revamps FX Joint Standing Committee membership
The Bank of England (BoE) has recast the terms of reference and membership of a key foreign-exchange industry committee to take account of the growing diversity of the forex market in the UK and the central role that will be played by the new global code of conduct.
The Foreign Exchange Joint Standing Committee (FXJSC) was established in 1973 and has remained an important forum for discussion between industry practitioners, regulators and central bankers.
However, the committee came under fire during the recent benchmark scandal, with allegations that officials at the BoE had failed to escalate concerns over improper market behaviour.
The chief dealers’ subgroup of the FXJSC, which was the principle area of concern, has long since been disbanded, but a more recent review has also wound up a buy-side sub-committee, bringing representatives of buy-side firms on to the main committee.
The broader membership of the FXJSC has also changed. Michael Cross, former head of the BoE’s FX division, had chaired the committee for six years, up until his departure from the central bank last year. The new chairman is Chris Salmon, executive director for markets at the BoE.
Other recent departures include JPMorgan’s Troy Rohrbaugh, Brian Welch of the Association of Corporate Treasurers, and Andrew Rogan of the British Bankers’ Association. An updated membership list has not yet been published, but it is understood the net membership of the committee has grown, with senior representation from the major dealers.
The FXJSC held its first meeting of the year at the BoE on January 28 and ratified the new terms of reference, which had been drawn up by the central bank last year. The terms state that membership should comprise senior practitioners from financial and non-financial institutions, brokers, market infrastructures, industry associations and public authorities.
“Members are invited to contribute with a view to furthering the interests of the wholesale FX market, rather than representing the interests of their individual institutions,” the terms of reference state. Membership is dependent on relevant expertise and is therefore determined on an individual rather than a firm basis.
The new terms of reference also commit the FXJSC to contributing to the production, review and maintenance of the global FX code of conduct, which is being developed by the FX Working Group (FXWG), an international body of central bankers appointed last year by the Bank for International Settlements.
An FXWG workstream led by Salmon is developing proposals to promote and incentivize adherence to the code of conduct, which will address some of the gaps in existing rulebooks. The FXJSC and other regional FX committees are also expected to review early drafts of the new code, before its being finalised by May 2017.
The FXJSC has usually convened six times per year, and the new terms of reference commit it to meeting at least quarterly. However, the next meeting will be held sooner than usual, in mid-February, because of the need to discuss the code of conduct.
The BoE declined to comment.