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Minutes of the London FXJSC Operations Sub-committee Meeting – 19 June 2024
Minutes
Item 1 – Welcome and Apologies
James Kaye (Chair, HSBC) welcomed two new members to the Committee, Daniel Hoye (NatWest Markets) and Mark Codling (Deutsche Bank). The Chair also welcomed guests Adam Conn (Baillie Gifford), Andrew Harvey (Global Financial Markets Association), Lia Oyman (Franklin Templeton), Nigell Todd (Fidelity International) and Sarah Healey (Fidelity International). The Chair also welcomed alternates Aparna Shrivastava (Morgan Stanley), Dean Chard (SWIFT), and Emily Martin (Bank of England).
The Chair noted apologies from Andrew Batcher (LCH), Andrew Grice (Bank of England), Claire Forster-Lee (Morgan Stanley) and Joe Halberstadt (SWIFT).
Item 2 – Minutes of the February Meeting, feedback from the March Main FXJSC Committee meeting and Terms of Reference Review
The minutes from the 28 February 2024 meeting were agreed by Committee members.
The Chair provided an overview of the March Main Committee meetingfootnote [1] noting that there had been an update on the FX Global code review, and a discussion on the evolution of custody FX.
The Chair noted that the Terms of Reference (ToR) had been updated following the annual review. The updates were to include the monitoring of actual and emerging operational risks as a key aim of the Committee and to streamline the membership process. It was noted that the updated ToR would be circulated to members after the meeting for comment.
Item 3 – North American Transition to T+1 Securities Settlement
The Chair opened the discussion on the impact on FX markets of the North American transition to T+1 securities settlement, which had been implemented at the end of May 2024. The Chair noted that overall, feedback had been positive with no significant issues identified. This view was affirmed by guest attendees, noting that they had also seen limited impact from the migration.
Committee members noted that the success had partly been due to the high levels of preparation and coverage, including through increased operating hours. Although the Committee cited some caution as firms reverted to business-as-usual.
The impact of the migration to T+1 securities settlement would continue to be monitored.
Item 4 – Investment Association update
Alex Chow (Investment Association (IA)) noted that in addition to the North American transition to T+1 securities settlement, the IA had considered the challenges European Market Infrastructure Regulation (EMIR) reporting posed for buy-side firms. The IA had also established a focus group on FX netting. The IA were also partnering with the FIX Trading Community to promote the use of standardised reject codes.
Item 5 – CLS update
John Hagon (CLS) noted that CLS ecosystem performance had improved markedly in the past 5-6 months.
Preparations for the Alternative Processing Site (APS) were progressing at pace, and the APS was expected to be operationally ready in Q3 2024. A market-wide test of the APS would occur at the end of the year.
Regarding the June International Monetary Market (IMM) settlement day on 20 June, immediately following Juneteenth Day in the US, Mr Hagon noted that CLS were forecasting a settlement volume of 4 million sides and a settlement value of circa £19 trillion, adding that the projected volume was well within proven system capacity.
Item 6 – GFXD update
Steve Forrest (UBS) provided an overview of the most recent GFMA FX Operations Committee meeting. There was a discussion on the North American move to T+1 securities settlement, and the April FX Settlement survey round. Mr Forrest further noted that the committee had also discussed the June IMM day, topics to cover in 2025, and agreed to establish a new resiliency-focused group.
Item 7 – FCA update
Oliver McCausland (FCA) noted that the FCA were in the pre-election quiet period. Essential business would continue but no major consultations or rule changes would be conducted during this period. It was also noted that the update to UK EMIR derivative reporting, known as EMIR Refit, would go-live in September 2024 and the FCA had published Q&As to support implementation.
Item 8 – FX Settlement Survey
Natalie Lovell (Bank of England) gave a brief overview of the April 2024 FX Settlement Survey. It was noted that the October 2024 survey round would provide a further opportunity for other central banks to adopt the new approach for collecting FX Settlement data ahead of the 2025 BIS Triennial survey.footnote [2]
Item 9 – Update on FX Settlement Crisis Playbook
Gail Smith (Deputy Chair – RBC Capital Markets) and Kerry Peacock (Deputy Chair – MUFG) gave an update on the FX Settlement Crisis Playbook. The playbook would be revised to be a best practice, principles-based document, and would include a non-exhaustive list of considerations for firms to consider in the event of an outage of a critical FX settlement system. A draft of the proposed playbook would be circulated to committee members for comment.
Item 10 – Any Other Business
The Chair noted that Paula Kenee (Northern Trust) would join the September meeting as an observer. It was noted that the September meeting would be hosted by Morgan Stanley at Canary Wharf.
Attendees
Aaron Mills – Citadel
Alex Chow – Investment Association
Anna Chadderton – Goldman Sachs
Daniel Hoye – NatWest Markets
Fiona O’Riordan – Citi
Gail Smith (Deputy Chair) – RBC Capital Markets
Gavin Platman – Insight Investment
James Andrews – JP Morgan
James Kaye (Chair) – HSBC
John Hagon – CLS
Kerry Peacock (Deputy Chair) – MUFG
Mark Codling – Deutsche Bank
Oliver McCausland – FCA
Steve Forrest – UBS
FXJSC Secretariat
Eleanor Garrett – Bank of England
Joe Hearn – Bank of England
Matthew Hartley (Legal Representative) – Bank of England
Natalie Lovell – Bank of England
Zish Jooma – Bank of England
Alternates
Aparna Shrivastava – Morgan Stanley
Dean Chard – SWIFT
Emily Martin – Bank of England
Guest attendees
Adam Conn – Baillie Gifford
Andrew Harvey – Global Financial Markets Association
Lia Oyman – Franklin Templeton
Nigell Todd – Fidelity International
Sarah Healy – Fidelity International
Apologies
Andrew Batchelor – LCH
Andrew Grice – Bank of England
Claire Forster-Lee – Morgan Stanley
Joe Halberstadt – SWIFT
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