Research guide - FXall handbook: Best practice in foreign exchange markets

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Including: ● MiFID update ● NDFs ● Automated trading ● Transaction Cost Analysis (TCA)


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FXall: Best practice guide 
 

Foreword



With ever-increasing pressure on market operators to produce greater profits and higher

levels of service to clients, the need to promote and implement good market practice

has never been greater; this has always been one of the foundation stones of ACI, The

Financial Markets Association (“ACI”). ACI’s Committee for Professionalism (“CFP”)

is responsible for all issues relating to good market practice and is an advisory body

charged with the following responsibilities:


• It formulates and proposes guidelines, both technical and ethical, concerning the

operations of the markets and the professional activities of ACI members, as laid

down in ACI’s book of good practice, “The Model Code” (which may be found via

the following link - http://www.aciforex.com/gb/aciforex-page.cfm?page_id=66 );


• At the request of the parties concerned, it gives advice and offers arbitration services

on professional disagreements or problems having an international character; and


• It formulates and proposes policies and guidelines establishing the educational and

professional standards for members of ACI.


The “over the counter” (“OTC”) market is not regulated in the way that the organized

exchanges are regulated, where trading takes place publicly between set hours in

a centralized location and where trading practices are regulated by the particular

exchange, so ACI’s “The Model Code” seeks to clarify common market practices in

the OTC market and offers “good practice recommendations” with respect to trading

activities, relationships, and other matters.


In recent years we have witnessed a dramatic rise in the volume of electronic trading

in the OTC market and this now represents a very substantial proportion of the OTC

transactions undertaken globally. The ethics and good practice guidelines promoted by

ACI apply as much in electronic trading as they do “person to person”, so any effort by

electronic trading providers, such as that being demonstrated by FXall through its Best

Practice Guide, to augment ACI’s guidance with their own recommendations is to be

welcomed and encouraged.


All market participants, whether users or providers, have a shared responsibility to

ensure that they operate to the highest expected standards; by doing so we will achieve

our objectives of maintaining confidence and integrity in the OTC market, keeping it

largely unregulated while giving all participants the opportunity to produce high levels of

service and profitability.