Minutes of the London FXJSC Operations Sub-Committee Meeting – 7 September 2022

Time: 2pm – 5pm | Location: Hybrid – Insight Investment Management 160 Queen Victoria Street, London EC4V 4LA


Minute 1 – Welcome and Apologies

John Blythe (Chair, Goldman Sachs) welcomed members to the FXJSC Operations Sub-committee meeting held at Insight Investment Management and via video conference. Mr Blythe welcomed guest presenters and observers Andrew Cooper (CLS), Richard Turner (Insight Investment Management) and James O’Connor, Nick Singh, Philippe Lintern, and Sharon Wallis (Bank of England).

Minute 2 – Minutes of the 7 June meeting

The minutes of the 7 June 2022 meeting were agreed, with no comments raised by members.

Minute 3 – Sector Response Framework (SRF)

Sharon Wallis (Bank of England) stated that the SRF is a collection of individual crisis committees and response groups. These exist across government, UK Financial Authorities and the wider financial sector. She explained that the SRF is owned and maintained by the Sector Response Framework Working Group, which was established as a new CMORG (Cross Market Operational Resilience Group) sub-group in 2022. It was established to partner across the sector, ensuring its embedding and maintenance whilst observing continuous improvement. She explained that there was progress in developing the governance framework, citing the linking of Terms of References and Memberships between committees as an example. Ms Wallis stated that the sector simulation (SIMEX22) exercise would help participants to rehearse the CMBCG (the Cross Market Business Continuity Group) and key sector response contingencies.

Ms Wallis also mentioned that the SRF had come into play during the Covid-19 pandemic where it responded to the threat of potential operational disruption. She explained that the SRF was the sector’s incident response platform, facilitating a response to incidents that affect more than one entity. Ms Wallis stated that the framework’s approach was cause agnostic and would include events such as cyber risk and physical response, ensuring cross-government coordination with participants across the industry, amongst other scenarios. She indicated that sector groups had established mini operating principles to aid the embedding of the overall objectives of the framework. Ms Wallis indicated that there were plans to update the Committee’s Terms of Reference and the FX Settlement Crisis playbook (playbook) to ensure the playbook keeps up with the dynamic nature of the business environment.

Members acknowledged these developments under the SRF and noted the need to resume regular review of the playbook.

Andrew Rogan (UK Finance) explained that UK Finance was aware of the SIMEX 22 plans, acknowledging its significance to the wider industry. He also updated members on his meeting with SWIFT with respect to operational resilience discussions. He also mentioned that with hybrid working arrangements firms were generally moving away from one to one employee to desk ratio in recovery sites for critical functions such as FX.

Minute 4 – Market Conditions – FX Future proofing

Richard Turner (Insight Investment Management) observed that the market was largely in turmoil and with high volatility; there was a focus on future proofing foreign exchange (FX). He noted that the firm had used the last 15 years for electronification of FX. Mr Turner explained that majority of the firm’s trade flow was electronic. Richard noted that electronification had eased regulatory reporting pressure on the firm and ensured the prompt availability of data on request. He indicated that there was still pressure resulting from tasks where manual processes were still in use. Mr Turner expressed concerns on the general use of third parties posed by data protection requirements.

Mr Turner stated the importance of the FX Global Code (Code) in highlighting good market practise and emphasised the need for more buy-side corporates to sign up and the challenges they faced. He reiterated the need to look into the governance aspect of the Code, including its interpretation.

On Standardised Approach for Counterparty Credit Risk (SA-CCR), Mr Turner said pressure from the SA-CCR created concentration risk, because of reduced players.

Members discussed the challenges in not only getting wider stakeholders to sign up to the Code but also in implementing it. Mr Turner mentioned that sign up was largely influenced by nature and size of the clients, with larger entities adopting the Code with more ease relative to the smaller ones.

Minute 5 – FXJSC Turnover Survey Results

Nick Singh and James O’Connor (Bank of England) presented data from the April 2022 FX Turnover Survey. The daily average FX turnover in London rose 19% to $3.276tn relative to the previous survey. This was a record high. FX spot turnover rose by 20%, and swaps rose 18% relative to the previous survey, with a record turnover of $1.689tn. The survey revealed that turnover rose broadly across currencies and products. The top three most traded currency pairs remained EUR/USD, GBP/USD and USD/JPY and the data showed record highs for the dollar versus the Chinese Renminbi, the 7th most traded currency pair.

Overall, the survey results showed that the UK continued to retain the highest proportion of international FX volumes. Members briefly discussed potential drivers for the reduction in FX swaps in the US survey relative to the continued growth of FX swaps in the UK survey. The forthcoming BIS triennial survey, also collated in April, could provide more clarity on those regional differences.

For the first time, the survey had collected data on settlement risk. These preliminary data showed that 74% of trades (in terms of volume) were settled using payment versus payment (PvP) system with majority (87%) via CLS. Those were largely interbank trades. Around 41% of trades settled for ‘Non-financial customers’ used a payment vs payment (PvP) system.

Minute 6 – Evolving Committee

John Blythe (Goldman Sachs) noted that the FXJSC Operations Sub-committee had more to do to improve the diversity of its membership and engaging with the Bank of England’s Meeting Varied People’s program. Mr Blythe encouraged the members to identify potential talent for membership and start thinking about the composition of the next generation of committee members. He emphasised the importance of aligning the membership evolution to remain representative of the FX market. To prepare the pipeline for future membership, the committee could use opportunities like having observers join future sub-committee meetings. Members discussed the chair’s views reiterating suggestions such as inviting observers and having representation from areas such as corporate treasury, infrastructure providers and hedge funds, among others.

Minute 7 – FCA update

Alan Barnes (FCA) highlighted that ESMA has published a call for evidence on pre-hedging to gather evidence on potentially providing guidance. ESMA is asking for views on the pre-hedging arrangements for requests for quotes, conditions under which pre-hedging would be appropriate, and arrangements for protecting investors such as client consent and disclosure.

Mr Barnes also noted that HMT had expressed an interest in the market view on moving from T+2 to T+1 settlement in response to the U.S Securities and Exchange Commission (SEC) proposing to move the US market from T+2 to T+1 settlement. Members briefly discussed the topic and the view was that there were generally no technical barriers in moving towards T+1 settlement.

Minute 8 – Education & Outreach

Operational Manager’s Working Group (ECB OMG and GFXD) Update

Steve Forrest (UBS) referenced several meetings by GFXD through the summer. They had discussed the Committee on Payments and Market Infrastructures (CPMI) paper on PvP payments and noted its important content.

He noted that SWIFT had provided an update on ISO20022. Mr Forrest added that claims process challenges with respect to Turkey and Russia had highlighted lessons learnt. He explained that there was still evidence of Ruble settlement failure with additional challenges from the backlog. The settlement challenges had seen a general interest penalty charge heightening.

Members discussed the claims process challenges and noted that overall unquantified risk remained a significant uncertainty. They also thought the ISO20022 Nov launch date was uncertain following the low percentage tested results.

Minute 9 – Any Other Business

Members agreed to include the Code adoption as an agenda item for the November 2022 meeting.

Next FXJSC Meeting: Tuesday 15 November 2022


Adam Jukes – Deutsche Bank
Alan Barnes (Alternate) – FCA
Andrew Grice – Bank of England
Andrew Rogan – UK Finance
Gail Smith – RBC
Gavin Platman (Deputy Chair) – Insight Investment
James Kaye – HSBC
Joe Halberstadt – SWIFT
John Blythe (Chair) – Goldman Sachs
Kerry Peacock (Deputy Chair) – MUFG
Mike Irwin – XTX Markets
Steve Forrest – UBS

FXJSC Secretariat

Matthew Hartley (Legal representative) – Bank of England
Sita Mistry – Bank of England
Timothy Mukopi – Bank of England

Guest attendees

Andrew Cooper – CLS- Alternate
James O’Connor – Bank of England
Natalie Grimes – Bank of England
Nirvar Singh – Bank of England
Philippe Lintern – Bank of England
Richard Turner – Insight Investment
Sharon Wallis – Bank of England


Boyd Winston – JP Morgan
John Hagon – CLS
Terri Van Praagh – Northern Trust


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