6 March 2023
Time: 2pm – 4pm | Location: In-person – Bank of England, 20 Moorgate, London, EC2R 6DA
Minutes
Item 1 – Welcome and Apologies
Andrew Hauser sent his apologies and the meeting was chaired by Philippe Lintern. Mr Lintern thanked John Blythe (Goldman Sachs) for his time as the chair of the Operations Sub-Committee and announced that Kerry Peacock (MUFG) would be his replacement. Mr Lintern also announced that Sally Francis-Cole (London Stock Exchange Group) would be joining the committee from June. Mr Lintern welcomed Anne Marie Flower (Insight Investment) and Christine Bowes (XTX Markets) as observers.
Item 2 – Minutes of the November Meeting
The minutes of the 22 November meeting were agreed, with no comments raised by members.
Item 3 – Market Update
Kevin Kimmel (Citadel Securities) and Robbie Boukhoufane (Schroders) presented an update on recent market developments. The presenters highlighted that FX volumes had been high in 2022 due to increased volatility, with Q4 experiencing the highest levels of volatility in major currency pairs since March 2020. Q4 had also seen spreads widening, although these had tightened back in recent months.
Members discussed the tension between strong demand, fuelled by lower gas prices, easing of supply chains and China reopening, and sticky core inflation coupled with the slow transmission of monetary tightening. This tension had led to uncertainty as to whether the economy would see a recovery, soft landing, or a recession. Members agreed that this tension had led to a lack of conviction on the direction of the US dollar, and some noted that market participants were keeping their FX positions short dated.
Item 4 – FXJSC Turnover Survey
Daniel Fajuke (Bank of England) presented the October FXJSC Turnover Survey results. Mr Fajuke noted most of the results was in line with long-term trends. A noticeable exception were FX swap volumes which had fallen in comparison to previous survey results. NDF volumes had risen to all time survey high. Mr Fajuke also stated that work had begun on collecting FX settlement data, using the same approach as the BIS triennial survey. Members agreed to review whether the survey needed to be updated to reflect changes in the FX market structure.
Item 5 – Diversity and Inclusion in FX Markets
The Chair highlighted that diversity was central to delivering the Bank of England's public mission. Feedback from members emphasised the importance of greater diversity in the FX market and the committee. Sandeep Tayal (Bank of England) provided an outline of the Bank of England’s Meeting Varied People (MVP) initiative and its objectives. Sita Mistry (Bank of England) presented the committee’s aim to build a diverse and inclusive forum by members increasing the diversity of talent pipeline, supporting FX market diversity and inclusion initiatives and discussing diversity and inclusion at meetings. The terms of reference had been updated to reflect the committee’s diversity and inclusion aim. Ms Mistry introduced the observer programme whereby members could invite more junior colleagues to a committee meeting, with a view to increase the diversity of the committee’s member pipeline.
Nina Moylett (M&G plc) presented the work that had been done at M&G to improve diversity through focusing on early careers pipelines, careers return programmes and talent management programmes.
The discussion raised some of the challenges and barriers to increasing diversity in front office roles. Working from home was identified as a positive step for some roles. Education and outreach to schools was identified as an important focus to develop future talent in the industry. The committee agreed to form a sub-group to consider tangible and achievable actions.
Item 6 – 2023 Forward Agenda Item
Forward agenda items for 2023 were discussed and the items of most interest were: the declining role of primary trading venues, FX settlement, diversity and inclusion, and shortening settlement periods and its implications for the FX market.
Item 7 – FXJSC Sub-Committee Updates
The Legal Sub-Committee had met on 28 February. Agenda items included discussions on: regulatory outlook, and potential changes to the terms of reference.
The Operations Sub-Committee had met on 1 March. Agenda items included: FXJSC Turnover Survey, GFXD 2023 agenda including securities T+1 settlement, SIMEX 22 update and operational resilience.
Item 8 – Regular Updates
Alan Barnes (FCA) provided an update on HMT’s consultation and call for evidence on the future financial services regulatory regime for cryptoassets and the establishment of the accelerated settlement task force which was considering whether and how to move the UK market to T+1 settlement.
James Kemp (FICC Markets Standards Board) provided an update on the GFXD decision to pause its Multilateral Close-Out Agreement work and FMSB work being carried out to input into ESMA’s consultation on pre-hedging.
Attendees
Alan Barnes – Financial Conduct Authority
David Clark – Refinitiv Benchmark Services Ltd
Galina Dimitrova – The Investment Association
James Kemp – FICC Markets Standards Board
John Blythe (Chair, Operations Sub-committee) – Goldman Sachs
Kevin Kimmel – Citadel Securities
Lisa Dukes – Corporate Representative - Association of Corporate Treasurers
Marc Bayle de Jesse – CLS
Neehal Shah – BNP Paribas
Nina Moylett – M&G plc
Philippe Lintern (Chair) – Bank of England
Rajesh Venkataramani – Goldman Sachs
Richard Purssell – Insight Investment
Russell Lascala – Deutsche Bank
Robbie Boukhoufane – Schroders
Sharon Blackman (Chair, Legal Sub-committee) – Citigroup
Simon Manwaring – Natwest Markets
Yan Wang – Bank of China
Zar Amrolia – XTX Markets
FXJSC Secretariat
Shaun Odili – Bank of England
Joe Hearn – Bank of England
George Johnston – Bank of England
Natalie Lovell – Bank of England
Charlotte Austin – Bank of England
Sita Mistry – Bank of England
Guest attendees
Anne-Marie Flower – Insight Investment (Observer)
Christine Bowes – XTX Markets (Observer)
Daniel Fajuke – Bank of England
Sandeep Tayal – Bank of England
Shiv Khetia – Bank of England
Apologies
Andrew Hauser (Chair) – Bank of England
Giles Page – Citigroup
Richard Bibbey – HSBC
Sarah Boyce – Association of Corporate Treasurers
Sophie Rutherford – State Street
Stephen Jefferies – JP Morgan