Why in news?
GFXC is a newly-constituted forum of central bankers and experts working towards promotion of a robust and transparent forex market.
The committee was set up in London during a meeting in May 2017 of:
public and private sector representatives from the foreign exchange committees of 16 international forex trading centres.
The Global Foreign Exchange Committee (GFXC) was established in May 2017 as a forum bringing together central banks and private sector participants with the aim to promote a robust, liquid, open, and appropriately transparent FX market in which a diverse set of participants, supported by resilient infrastructure, are able to confidently and effectively transact at competitive prices that reflect available information and in a manner that conforms to acceptable standards of behaviour.
In a progress report on ‘reducing misconduct risks in the financial sector’, the Financial Stability Board (FSB) informed the G20 Summit that actions to enhance conduct standards and adherence in markets include a ‘Global Code of Conduct for the Foreign Exchange Markets’.
FSB is an international body for global financial system.
This Code will be maintained and updated by the new GFXC, comprising public and private sector representatives from the foreign exchange committees of 16 international forex trading centres.
The objectives of the GFXC are:
to promote collaboration and communication among the local foreign exchange committees (FXCs) and non-GFXC jurisdictions with significant FX markets;
to exchange views on trends and developments in global FX markets, including on the structure and functioning of those markets, drawing on information gathered at the various FXCs; and
to promote, maintain and update on a regular basis the FX Global Code (the Code) and to consider good practices regarding effective mechanisms to support adherence.
It will also provide a forum for the exchange of views on market trends and developments.
What is GFEC?
The newly expanded and formalised GFXC, which will meet regularly, replaces a similar but more informal organisation of eight foreign exchange committees — namely those from Australia, Canada, Euro area, Hong Kong, Japan, Singapore, UK and the US.
The GFXC will also include:
representatives from existing, or soon to be established, foreign exchange committees or similar structures in Brazil, China, India, Korea, Mexico, South Africa, Sweden and Switzerland.
Members of the GFXC include central bank-sponsored Foreign Exchange Committees and similar structures in various regions. Each member Foreign Exchange Committee designates a central bank and private sector representative for the GFXC. Members currently include:
Australia - The Australian Foreign Exchange Committee
Brazil - Foreign Exchange Committee
Canada - The Canadian Foreign Exchange Committee
China - China Foreign Exchange Committee
Euro Area- The Foreign Exchange Contact Group
Hong Kong - Treasury Markets Association
India - Foreign Exchange Committee
Japan - Tokyo Foreign Exchange Committee
Mexico - The Mexican Foreign Exchange Committee
Scandinavia - Foreign Exchange Committee
Singapore - The Singapore Foreign Exchange Market Committee
South Africa - South African Foreign Exchange Committee
South Korea - Seoul Foreign Exchange Committee
Switzerland - Foreign Exchange Committee
United Kingdom - Foreign Exchange Joint Standing Committee
United States - Foreign Exchange Committee