The foreign exchange market is one of the largest and most liquid in the world and its ability to function effectively is of critical importance to all economic participants and regulators. 

 

We will not speculate on the causes and drivers of the rapid price movement in GBP last week, and there are usually multiple causes for market conditions. What this incident reveals, however, is that the changing nature of the global FX market brings some uncertainties. It is the responsibility of all industry participants to understand the risks of market disruption – which can range from technology to individual behaviour – and work together to find solutions.

 

"We expect the causes to reveal themselves over the coming days and weeks, and the focus will fall on what the market can do to operate as effectively as possible during such volatile periods. 

 

At all levels, people have worked hard to adapt to the changes and practices in the market, and champion new guidelines on market governance, ethics and behaviour. The ACI FMA will actively encourage the many solutions that improve the functioning of the market over the coming years.

 

Volatile markets are difficult, and disputes on rates and order fills can arise. The ethos of the ACI FMA is to solve this through bilateral discussions. The ACI Dispute Resolution mechanism was successfully deployed after the SNB event for similar reasons, and it shows that the market can achieve its own solutions to difficult issues.