15 June 2023
Time: 1pm – 3pm | Location: In-person – Bank of England, Threadneedle St, London, EC2R 8AH
Minute 1 – Welcome and Apologies
Kerry Peacock (Chair, MUFG) welcomed guest presenters Christophe Coutte (RBC Capital Markets), Daniel Fajuke (Bank of England), Sharon Wallis (Bank of England), and observers Dean Chard (SWIFT), and Rita Davy Sen (HSBC). There were apologies from Boyd Winston (JP Morgan), Gavin Platman (Insight Investment), and John Hagon (CLS).
Minute 2 – Minutes of the March Meeting
The minutes of the 1 March 2023 meeting were agreed.
Minute 3 – Terms of Reference Update
The Chair outlined updates to the Operations Sub-Committee’s Terms of Reference. The changes related to the Committee’s participation in the Sector Response Framework (SRF), and its diversity and inclusion aim.
Minute 4 – Membership Update
The Chair provided an update on new members joining the Operations Sub-Committee from the next meeting onwards.
Minute 5 – Market Conditions
Christophe Coutte (RBC Capital Markets) presented an update on recent market developments. Analysts were forecasting an elevated risk of recession in early 2024 due to high core inflation. Mr Coutte noted that despite wider G10 policy rates since 2008, G10 FX volatility had fallen. Mr Coutte also noted that FX returns vary widely depending on whether the US enters recession alone, or whether the US and the rest of the world are in recession together.
Minute 6 – FXJSC Turnover Survey
Daniel Fajuke (Bank of England) presented proposed updates to the “Execution Method” categories in the FXJSC Turnover Survey. The updates would align the survey more closely to the BIS triennial survey. Members discussed the proposed updates including the challenges around obtaining data on transactions executed via prime brokerage. During the discussion Mr Fajuke noted that there was an aim to introduce the proposed updates in Q4 2023.
Mr Fajuke also shared a proposal to update the survey used to collect FX settlement data. Mathias Drehmann (Head of Secretariat, Markets Committee, BIS) and other BIS colleagues dialled into this section of the meeting. The updates were intended to strengthen FX settlement data integrity and improve the consistency of responses. Mr Fajuke outlined next steps which included the establishment of a small working group to refine the survey questions, which would be tested by some local FX committees through their semi-annual FX turnover surveys.
Minute 7 – SIMEX 22 and operational resilience
Sharon Wallis (Bank of England) presented an overview of SIMEX 22 – a two-day market-wide simulation exercise to test the UK financial sector’s resilience to a major operational disruption. The FXJSC participated in the exercise as an observer. Ms Wallis summarised collective lessons from SIMEX 22 including equipping the Cross Market Business Continuity Group (CMBCG) to better identify the most urgent issues driving effective decision making and to hand-off technical issues to specific operational level groups during incidents.
Ms Wallis also provided an update on the FXJSC’s progress in embedding the Sector Response Framework’s minimum operating principles, including highlighting the need for the FX Settlement Playbook to be updated. Members discussed the playbook update, with suggestions including broadening focus from FX scenarios to impacts and inclusion of coordination arrangements.
Minute 8 – FCA Regulatory Update
Oliver McCausland (FCA) updated the Committee on an upcoming FCA policy statement on the Trading Venue Perimeter with relevance for FX platforms. Mr McCausland also updated Members on the FCA’s work with the Accelerated Settlement Taskforce looking at the potential impact of the US moving to T+1 securities settlement.
Minute 9 – Education & Outreach
Steve Forrest (UBS) updated Members on the GFXD’s most recent agenda items including Payment versus Payment (PvP) settlement and US T+1 securities settlement. The GFXD were preparing the 2024 agenda. Mr Forrest also noted the ECB’s paper on sound practices for managing FX settlement risk.
UK Finance Update
Andrew Rogan (UK Finance) updated the Committee on UK Finance’s ongoing work to implement the UK’s operational resilience framework, including work to reduce the divergence in taxonomies across firms. Mr Rogan also updated Members on UK Finance’s recent work on national power outages.
Minute 10 – Any Other Business
The Chair informed the Committee that Gavin Platman (Insight Investment) had stepped down as Deputy Chair and had been replaced by Gail Smith (RBC Capital Markets).
Adam Jukes – Deutsche Bank
Andrew Grice – Bank of England
Andrew Rogan – UK Finance
Claire Forster-Lee – Morgan Stanley
Gail Smith (Deputy Chair) – RBC
James Kaye (Deputy Chair) – HSBC
Joe Halberstadt – SWIFT
Kerry Peacock (Chair) – MUFG
Oliver McCausland – FCA
Steve Forrest – UBS
Enyi Chen – Bank of England
Joe Hearn – Bank of England
Mala Gopalakrishnan – Bank of England
Matthew Hartley (Legal representative) – Bank of England
Natalie Lovell – Bank of England
Zish Jooma – Bank of England
Christophe Coutte – RBCCM (Presenter)
Daniel Fajuke – Bank of England (Presenter)
Dean Chard – SWIFT (Observer)
James Andrews – JP Morgan (Alternate)
Rita Davy Sen – HSBC (Observer)
Sharon Wallis – Bank of England (Presenter)
Boyd Winston – JP Morgan
Gavin Platman – Insight Investment
John Hagon – CLS
Mike Irwin – XTX Markets
Terri van Praagh – Northern Trust