NEW YORK (Reuters) - Participants in the foreign exchange market should all adopt the global code of conduct for currency trading in a bid to achieve the highest transparency and ethical standards in a market hit by scandals, the Federal Reserve's top markets official said on Wednesday.
This was a reference to guidelines from the industry that stemmed from charges of rigging and misuse of confidential customer order information that saw seven of the world's top banks fined about $10 billion at the end of a global inquiry in 2015.
"I encourage you to adopt the Code as a benchmark for your firm's activities in the wholesale FX market and use the Statement of Commitment to demonstrate that adoption to your fellow participants," New York Federal Reserve's markets chief Simon Potter said in a prepared speech at a conference sponsored by FX Week.
The 55 principles in the code cover six primary areas - ethics; governance; execution; information sharing; risk management and compliance and confirmation and settlement.
Central banks and the foreign exchange industry can take steps to support the adoption of the code among all types of participants that include dealers, high frequency trading firms, FX trading platforms and algorithmic service providers, Potter said.
The New York Fed is currently assessing its currency market activities relative to the code and evaluating what steps, if any, it must take to be able to make its own statement of commitment, Potter said.
Reporting by Richard Leong; Editing by Chizu Nomiyama