Almost half of top LPs yet to publish GFXC disclosures

FX market disclosure remains patchy, fuelling buy-side concerns over transparency


In soaring July temperatures, it’s foreign exchange liquidity providers’ mixed response to disclosure requirements that’s getting buy-side clients hot under the collar. Almost half the top LPs are yet to produce disclosure sheets detailing their FX trading practices, as now required by the Global Foreign Exchange Committee (GFXC).

Eleven of the top 25 LPs, or 44%, have yet to publish these disclosures – despite having had seven months to do so – and are now being encouraged to publish by the end of this month. The disclosures are designed to provide market participants with the greatest level of transparency to date surrounding LPs’ FX trading practices, but their lack of uptake has reignited buy-side concerns about transparency levels in the FX market.

Those yet to publish a GFXC disclosure include: Bank of America, Credit Agricole, Flow Traders, HC Tech, ING, Jump Trading, Nomura, Santander, Societe Generale, State Street, and Virtu Financial.

“Quite a lot of LPs have yet to disclose any information regarding trading practices, such as last look, which says a lot about the continued struggle for transparency within the market,” says Joost de Bakker, buy-side trader at Cardano.

Since the conclusion of the GFXC’s three-year review of the Global FX Code of Conduct in July 2021, the committee has urged all LPs within the FX market to utilise template disclosure sheets to detail their approach to a number of trading practices across the FX market – including last look, pre-hedging, and anonymous trading – in order to allow market participants to make more informed decisions about their trading partners. Since December 2021, LPs have been able to upload these disclosure sheets to the GFXC’s website.

The head of FX trading at a European bank tells FX Markets that the GFXC is now encouraging all LPs to have published a disclosure sheet by the end of this month – a deadline given to attendees at the most recent GFXC meeting in Zurich on June 28.

Flow Traders is now expected to produce a GFXC disclosure sheet as early as July 15 – the same day the 20 millisecond additional hold time it currently imposes on clients when trading anonymously will be removed (see table A).

“It’s important to keep the fire under market participants’ feet,” said Andrea Maechler, GFXC chair and a member of the governing board at the Swiss National Bank, at an FX Markets industry event last month. She nonetheless describes disclosures to date as encouraging. “Everybody benefits from an FX market where trading really takes place in a fair, transparent, and open way. These disclosures should really help us move in that direction,” she added.

LPs were previously expected to take between six and 12 months to complete these disclosure sheets, according to Rohan Churm, head of the foreign exchange division at the Bank of England, speaking at a separate FX Markets event in December 2021.


Many LPs are using their GFXC disclosures as an opportunity to publicly remove the additional hold times they previously applied to client trades subject to last look checks, following updated guidance on the practice from former GFXC chair Guy Debelle in September 2021.

In June, Barclays became the latest of the top LPs to remove its additional hold time when it published its GFXC sheet on its own website – following the likes of Credit Suisse, Goldman Sachs, Morgan Stanley, UBS and NatWest Markets in the move.

Last look is broadly comprised of two elements: a price validity check and a credit check. But many liquidity providers have historically placed an additional hold time of as much as 300 milliseconds on top of these checks to monitor client behaviour.



Such removals signal that last look is now “being applied for the reason it was intended, rather than creating perceptions of potential abuse”, according to Richard de Roos, head of corporate and investment banking operations at Standard Bank and vice-chair of the GFXC, who was speaking at the same FX Markets event as Maechler.

Of the 11 LPs yet to publish, two – Credit Agricole and ING – have confirmed that they do not impose an additional hold time when conducting last look checks. A confirmation of zero hold time during last look can be found on Credit Agricole’s website, while ING has previously confirmed to FX Markets that no such hold time is imposed.

It’s unclear whether the remaining nine LPs impose an additional hold time on clients subject to last look – despite the UK Financial Conduct Authority stating in November that such hold times are contrary to the code – and may thus result in regulatory investigations.

“We have seen examples of liquidity providers who signed the first version of the code, have not publicly re-adhered, and are now clearly flouting the new guidance from the GFXC and FCA," says Jeremy Smart, global head of distribution at XTX.

Bank of America, Nomura, Societe Generale, and State Street declined to comment when asked by FX Markets when their GFXC disclosure sheet is expected to be published. Credit Agricole, HC Tech, Jump Trading, Santander, and Virtu Financial did not respond to FX Markets’ request for comment.

Not on-the-spot

Not every LP within the market remains so opaque about its trading practices today. Two of the most transparent banks in relation to last look practices are JP Morgan and NatWest Markets. The pair’s GFXC disclosures not only provide information on how long last look checks are expected to take for spot FX but for their full suite of FX products, including FX swaps, forwards, and options.

“Although adoption of the [GFXC disclosure] sheet is not mandatory, in deciding to complete it we wanted to provide clients with detailed and clear information,” says a NatWest Markets spokesperson. “As such, we felt it helpful to split out the last look times for each product separately to increase transparency.”

Similarly, Arnaud Floesser, head of core eFX trading at JP Morgan says: “In a nutshell, we have taken an active stance on disclosures because we want to encourage a fair and transparent marketplace for our clients. In our view, it’s our responsibility to do what we can to create a sustainable, open and efficient relationship with our clients.”

“Many years ago we decided to remove any additional hold time within our last look trade acceptance because it makes our liquidity more reliable and easier to use,” he continues.

Others are not necessarily looking to disclose more information around last look times for FX derivatives but are focused on reducing the amount of time it takes to conduct the checks.

“It’s high up on the agenda to improve our technology so that we can conduct last look as quickly as possible, not just in spot FX but in swaps and options as well,” says the head of electronic FX trading at a second European bank.

“We’re talking about latencies that are very short anyway but there are more complex calculations involved for non-spot FX products and it’s now much higher up our priority list to ensure that we're minimising latency in our price and credit checks. Clients are very aware of round-trip times and how important they are in all FX products, not just spot FX.”

Either way, come August 1, the levels of transparency currently available within the FX market – and the number of LPs still imposing an additional hold time – could look very different.

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