Thomson Reuters to tighten forex trading rules

Foreign exchange is dominated by Thomson Reuters and rival platform EBS. For the past six months the market has been investigated by regulators around the world into allegations of price-rigging and collusion between traders.

After 12 months of consultation with market participants, Thomson Reuters is proposing changes to its Rule Book, a code of conduct designed to foster higher trading standards “through a combination of platform controls and behavioural rules”, said Phil Weisberg (photo), global head of FX.

There will be a six-week window for feedback before publication in the summer, a company spokesman said.

The proposals include more clearly defined guidelines making it easier to execute orders and promoting closer surveillance and reporting of client trading activity.

“By raising the bar on expected trading behaviour, the rules aim to discourage abuse, manipulation or disorderly conduct, as well as behaviours that do not enhance liquidity for the market as a whole,” Thomson Reuters said in a statement.

At the centre of investigations by regulators including Britain’s Financial Conduct Authority and the US Department of Justice are allegations that senior traders shared market-sensitive information relevant for the London fix, which is set at 4 pm London time, using actual trades. London is the hub of the global currency market, accounting for some 40 per cent of the $5.3 trillion traded on an average day.

The key benchmark relates to several exchange rates including the euro, sterling, Swiss franc and yen. These are compiled using data from Thomson Reuters and other providers. They are used as reference rates for trillions of dollars worth of investments, trade and corporate deals around the world. ■