Foreign Exchange (FX) markets are among the most liquid and complex financial markets in the world. Trillions of dollars are traded daily, making it essential for market participants to ensure fair and transparent execution of their FX transactions. To facilitate this, the Global FX Code of Conduct was established to provide a framework for achieving best execution in the FX market.


Understanding FX Best Execution

Best execution is a fundamental principle in financial markets, including the FX market. It refers to the obligation of financial institutions and market participants to ensure that their clients’ orders are executed promptly, fairly, and at the most favourable terms available in the market. Achieving best execution involves taking into account various factors, including price, speed, cost, and reliability of execution, while also considering any specific instructions provided by the client.


The Global FX Code of Conduct

The Global FX Code of Conduct is a comprehensive set of principles and guidelines established by the Bank for International Settlements (BIS) to promote the integrity and effective functioning of the global FX market. It was developed in collaboration with central banks and market participants from around the world and serves as a benchmark for best practices in the industry. The Code was created in response to regulatory changes and a growing need for greater transparency and fairness in FX trading.


Linking FX Best Execution to the Global FX Code of Conduct

The Global FX Code of Conduct plays a pivotal role in shaping best execution practices in the FX market. Here’s how it connects with and reinforces the concept of FX best execution:

  • Transparency and Disclosure: The Code emphasizes the importance of transparency in the FX market. This includes disclosing relevant information about execution methods, order handling processes, and pricing to clients. By doing so, market participants enable their clients to make informed decisions, contributing to better execution quality.
  • Liquidity Providers: The Code encourages market participants to establish relationships with a range of liquidity providers to enhance the quality of execution. By diversifying their sources of liquidity, institutions can obtain competitive pricing and execute orders at favourable terms. In South Africa the South African Reserve Bank only allows companies to trade with an authorised dealer and comply with exchange control rulings.
  • Risk Management: The Code underscores the need for risk management practices to ensure that execution is reliable, even during periods of market stress. Market participants are urged to have robust risk management mechanisms in place to minimise the likelihood of execution issues. At TreasuryONE, we begin by gaining a deep understanding of the specific risks inherent in your business. Our experienced risk management team analyses your industry dynamics, market factors, and unique risk exposures. By comprehensively assessing your risk landscape, we can tailor our solutions to meet your specific needs. Market risk management is an ongoing process, and we continuously review and refine our hedging strategies based on market developments and your evolving risk profile. Our proactive approach ensures that your risk management remains effective and aligned with your changing business requirements.
  • Compliance and Controls: The Code strongly emphasises establishing a robust compliance framework. It encourages institutions to develop and maintain effective controls to ensure adherence to the principles outlined in the Code, including best execution. At TreasuryONE, all our transactions are executed using the IT2 Treasury Management System. Our platform is integrated with all banks for auto-confirmation of deals, and our FX operations team has extensive knowledge in assisting clients with the settlement of FX transactions.
  • Documentation: The Code advises market participants to maintain clear and detailed documentation of all FX transactions. Proper documentation helps ensure that best execution obligations are met and provides a record of execution quality for audit and regulatory purposes. The IT2 treasury system has a robust audit trail and workflow methodology framework that underpins these values of the Global FX Code.



The concept of FX best execution is crucial for maintaining fairness and transparency in the FX market. The Global FX Code of Conduct provides a comprehensive framework for market participants to follow, promoting best practices and integrity in their FX trading activities. By linking FX best execution to the principles of the Code, market participants can enhance their execution quality, maintain client trust, and contribute to the overall health and integrity of the global FX market.

In summary, the Global FX Code of Conduct serves as a vital tool for market participants, helping them navigate the complexities of the FX market while adhering to best execution principles and ensuring the highest standards of integrity and transparency.


About TreasuryONE Risk Management Services

  • R330 billion executed in 2022 on behalf of clients
  • More than 29 000 FX deals confirmed in 2022
  • More than 14 000 FX settlements in 2022
  • Extensive market research with ETM Analytics

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