Minutes of the London FXJSC Legal Sub-Committee Meeting - 16 March 2022

The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC) Legal Sub-Committee. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
Published on 10 June 2022

Date of meeting: 16 March 2022
Time 3pm – 4.30pm | Location: Video meeting

Minutes

Minute 1 – Introduction and Minutes

The minutes of the meeting of 16 November 2021 were approved. The Chair introduced George Johnston to the Committee and noted that he had taken over as lead of the Secretariat function now that Jonathan Grant had moved to another role within the Bank.

Minute 2 – FXJSC Turnover Survey results

Nirvar Singh and Charlie Warburton from the Bank of England’s Foreign Exchange Division discussed the results from the October 2021 FXJSC Turnover Survey. The team explained that daily average FX turnover in London fell 6% in October 2021, relative to a record-high in April 2021, but highlighted that turnover rose 7% year-on-year (October 2020). Additionally, FX turnover fell for most instruments in October 2021, relative to April 2021, and that the majority of the fall was driven by falls in FX swaps and spot. Furthermore, the team highlighted that the top 9 currency pairs maintained their market share (74%) and EUR/USD remained the most traded pair, however, GBP/USD remained the second most traded pair, with turnover rising by 13% since April 2021 and that the turnover outside the top nine pairs also fell 6% over the same period.

Minute 3 – Discussion on the impacts of Russian’s invasion of Ukraine

The committee members discussed their observations on a number of legal issues arising from the developments relating to Russia’s invasion of Ukraine. The committee discussed currency disruption and its implications on FX transactions. The committee also discussed some of the practical implications of the recent sanctions against Russia including in relation to settlement of financial transactions.

Minute 4 – Look back, look forward from a regulatory perspective

Simon Gleeson from Clifford Chance covered a number of topics including the Global FX code, CRD VI proposals, Crypto assets and the Basel proposals with a specific focus on the regulatory impact in his look back / look forward session.

Simon also discussed issues relating to AML and interactions with sanctions legislation. In particular, Simon focused on the importance of record keeping for decision making regarding AML and sanctioned entities.

Finally, Simon highlighted the issues surrounding differing values of currency depending on who is trading the currency and the location of the relevant market. In particular, Simon discussed the issue of the value of the Ruble in transactions that took place before the Russian/Ukraine conflict but are due to settle after the conflict.

Attendees

Sharon Blackman (Chair) – Citigroup
George Johnston (Secretary) - Bank of England
David Harris - Financial Conduct Authority (FCA)
Tamsin Rolls - JP Morgan
Baljit Saini - NatWest
Rakesh Shah - Standard Chartered
Diane Bouwmeester – London Stock Exchange Group
Harkamal Atwal – HSBC
Nimisha Kanabar - Morgan Stanley

FXJSC Legal Sub-Committee Secretariat

Zara Coe – Bank of England
Matthew Hartley – Bank of England
Jeremy Pitblado – Bank of England

Guest attendees

Simon Gleeson - Clifford Chance
Nirvar Singh – Bank of England
Charlie Warburton – Bank of England

Apologies

Dan Parker - Goldman Sachs
Richard LambUBS
Sunil Samani - XTX Markets
Jateen Shah - Bank of America
Simon Goldsworthy - Deutsche Bank
Simon Helm - TP ICAP
Nasia Pachiti Pallikaropoulou – Barclays
Gaynor Wood – CLS

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