Financial Markets Association Calls For Increased Forex Regulation

by Glen Shapiro, LawAndTax-News.com, New York

27 September 2004

In an interview with Reuters last week, president of the Financial Markets Association (ACI), Godfried De Vidts revealed that the Association, which is the international umbrella body for foreign exchange traders, is calling for increased self-regulation of the industry.

The foreign exchange (Forex) industry turns over around $1.2 trillion per day, according to the news service, but it is less policed by regulatory authorities than almost any other investment sector.

Following several recent scandals in various different countries, Mr De Vidts explained that the ACI is calling for an international initiative to prevent those traders who have not passed its exams (which include a model code of conduct and practice) from participating in the foreign exchange market.

"We are looking for accreditation of our dealing certificate and diploma by the regulators in the world...This means that without taking the ACI exams you can't trade. It's important for regulators to recognize our model code recommendations," he told Reuters, continuing:

"We will increase our cooperation and work with the authorities in making sure our framework remains self-regulatory...If you restrict innovation in the market through regulation, your market is not going to evolve."

According to the report, the ACI's model code currently has regulatory standing in Australia, Austria, Canada, Cyprus, Hong Kong, Malaysia, Malta, Mauritius, the Philippines, Slovenia and Switzerland.

The Association chief also revealed that discussions to adopt the exams as mandatory accreditation are underway in Singapore, Indonesia, Canada, Bahrain, Hong Kong, Malaysia and Indonesia. In addition, Britain and the United States, the world's two largest currency trading centres, have both adopted the code in part.

Recommended