Minutes of the London FXJSC Operations Sub-Committee Extraordinary Meeting - 12 September 2022

The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC), which is a forum for discussion of the wholesale foreign exchange market. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
Published on 25 November 2022

Date: 12 September 2022

Time: 12pm – 12.30pm | Location: Conference call

Minutes

On 12 September 2022, the London Foreign Exchange Joint Standing Committee (FXJSC) Operations Sub-Committee held an extraordinary meeting (via conference call) to discuss FX operational issues in light of the announcement of a new UK bank holiday to be observed on 19 September 2022. The Bank of England (“the Bank”) had published a market notice earlier that dayfootnote [1]. The meeting was conducted in accordance with the FXJSC’s Terms of Reference and Competition Guidelines.

Minute 1 – Welcome and Apologies

Grigoria Christodoulou (Bank of England) welcomed attendees and provided some context for convening the extraordinary meeting before handing over to John Blythe (Chair, Goldman Sachs). Members were asked about operational preparations for the Bank Holiday, including processes being implemented, as well as to flag any emerging challenges across markets.

Minute 2 – Market Conditions and Process Implementation

Members noted that, with the exception of some manual rolling of settlement dates due to the short notice, standard processes for adding a new bank holiday were being implemented. There was no noticeable impact on market functioning.

CLS had issued a notice stating that September 19th would be declared a non-settlement day for GBP and that any trades in the system involving GBP due to settle on that day would be rolled to the next valid business day for both currencies. There were no anticipated settlement issues, but members were asked to reach out if there were any concerns. SWIFT indicated it would continue to operate as a normal business day, with no specific contingency plan required.

The sub-committee members noted that the general approach across markets was to roll trades to the next valid business day, but there was some differences on the methods to get there. The main divergence in approach was between an automated, roll to the next good business day, and the requirement to manually cancel and rebook trades with the new settlement date. This appeared to be dictated by banks’ individual trading and settlement systems. As a result, members had been working with counterparties bilaterally, across asset classes, in order to ensure all affected trades would settle appropriately. It did appear to be more noticeable in Repo market rather than in FX.

Members stressed the importance of confirming any new bank holidays in other jurisdictions. At the time of the meeting Australia had confirmed a bank holiday on 22 September. It was expected the Bank of Canada would also announce a bank holiday. A “day of mourning” had been announced in New Zealand for 26 September, but it was unclear whether banking operations would take place on that date. Both Singapore and South Africa were not expected to announce any bank holidays. Members noted that that the same playbook as GBP and AUD would be used for any new bank holiday announced in other jurisdictions. Members did not expect any market disruption from other jurisdictions announcing a bank holiday.

Members noted that potential staffing issues were being addressed, as well as knock-on impacts to other business. It was also noted that Wednesday 21 September was the settlement date for International Monetary Market (IMM) trades, which could lead to increased trading in the run-up. Any additional projects due to take place around the new UK bank holiday were being postponed/rearranged in order to ease potential operational risks.

The Chair summarised the meeting, confirming members were initiating their respective standard approaches to additional bank holidays, with no noticeable operational impact. Members were invited to share any further thoughts or comments via email.

Ms Christodoulou closed the call by reiterating the Bank remained available to discuss any observations or concerns.

Attendees

Adam Jukes - Deutsche Bank
Alan Barnes – FCA
Andrew Rogan - UK Finance
Anna Chadderton - Goldman Sachs
Boyd Winston - JP Morgan
Chris Lee - BNY Mellon
Claire Foster-Lee - Morgan Stanley
Emily King (Alternate) - Bank of England
Gavin Platman - Insight Investment
James Kaye – HSBC
Jane Olney (Alternate) - Royal Bank of Canada
Joe Halberstadt – SWIFT
John Blythe (Chair) - Goldman Sachs
John Hagon – CLS
Kerry Peacock – MUFG
Philippe Lintern - Bank of England
Steve Forrest – UBS
Terri Van Praagh - Northern Trust
Thomas Brend - Goldman Sachs

FXJSC Secretariat

Alex Hutton – Bank of England
Alice Hobday – Bank of England
George Johnston (Legal Secretariat) – Bank of England
Grigoria Christodoulou – Bank of England

Apologies

Sharon Chapman – Barclays
Gail Smith – Royal Bank of Canada
Mike Irwin – XTX Markets

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