Minutes of the London FXJSC Operations Sub-committee Meeting – 1 March 2023

Minutes

Minute 1 – Welcome and Apologies

John Blythe (Chair, Goldman Sachs) welcomed new member Oliver McCausland (FCA). He welcomed guest presenters Derek Halpenny (MUFG), Daniel Fajuke (Bank of England), Andrew Harvey (GFXD) and observer Anna Chadderton (Goldman Sachs).

Mr Blythe updated the Committee on changes to the Chair after he steps down. It was noted that Kerry Peacock (MUFG) would take on the Chair role and James Kaye (HSBC) would take on the Deputy Chair role.

Minute 2 – Minutes of the November Meeting

The minutes of the 15 November 2022 meeting were agreed, with no comments raised by members.

Minute 3 – Market Update

Derek Halpenny (MUFG) presented an update on recent market developments. Looking ahead, Mr Halpenny noted that inflation would continue to be a focus for markets and central banks, as well as the US debt ceiling and whether the US Dollar (USD) strength would continue. Mr Halpenny also noted that the Bank of Japan would receive a new governor after its next monetary policy meeting but market expectation was for any change to policy to come no earlier than the June meeting.

Minute 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 discussed results of the survey in comparison to other local foreign exchange committee survey results.

Minute 5 – GFXD 2023 Agenda and Securities T+1 Settlement

Andrew Harvey (GFXD) presented the GFXD’s post trade agenda for 2023. The key topics were settlement risk including GFXD engagement in the CPMI cross-border payments project, public sector developments such as central banking digital currencies and the promotion of harmonised standards for trade reporting.

Mr Harvey updated the Committee on the international timelines across different countries’ movement to T+1 settlement for securities. Mr Harvey noted the FX considerations for T+1 settlement included trade processes and ensuring clients in all jurisdictions are aware of the changes. The Committee discussed additional impacts of US securities moving to T+1 and the implications on FX confirmation and matching cycles.

Minute 6 – SIMEX 22 Update

Kerry Peacock (MUFG) updated the Committee on Simulation Exercise 2022 (SIMEX 22), which had taken place on 15 and 17 November 2022. The FXJSC had participated in this exercise as an observer. The exercise was a simulation of a technology failure at a large bank and tested the financial sector’s response. The Committee discussed the impact of social media and the contagion risk highlighted by the exercise.

Minute 7 – FCA Update

Oliver McCausland (FCA) updated the Committee on the establishment of the accelerated settlement task force which is considering whether and how to move the UK market to T+1 settlement. Mr McCausland informed members about the joint Bank of England and Financial Conduct Authority policy statement on changes to the derivatives reporting framework under UK EMIR, published February 2023.

Minute 8 – Forward Agenda

The Committee discussed potential forward agenda items including operational resilience, settlement risk and digital assets. The Committee also discussed ideas to increase the diversity of its talent pipeline.

Minute 9 – Education & Outreach

GFXD Update

Steve Forrest (UBS) gave an update on the anonymised survey GFXD undertook on Russian Ruble claims.

CLS Update

John Hagon (CLS) reflected on CLS settlement service performance in 2022 and lessons learnt, informing the members that whilst there had been a reduction in the number of payment delays, the impact of some of these delays had been more significant than normal.  

Minute 10 – Any Other Business

The members and the Secretariat thanked Mr Blythe for his contributions to the Committee.

Attendees

Adam Jukes – Deutsche Bank

Claire Forster-Lee – Morgan Stanley

Gail Smith – RBC

Gavin Platman (Deputy Chair) – Insight Investment

James Kaye – HSBC

John Blythe (Chair) – Goldman Sachs

John Hagon – CLS

Kerry Peacock (Deputy Chair) – MUFG

Oliver McCausland – FCA

Steve Forrest – UBS

FXJSC Secretariat

Enyi Chen – Bank of England

Joe Hearn – Bank of England

Matthew Hartley (Legal representative) – Bank of England

Natalie Lovell – Bank of England

Nicole Webster – Bank of England

Sita Mistry – Bank of England

Guest attendees

Andrew Harvey – GFXD

Anna Chadderton – Goldman Sachs (Observer)

Daniel Fajuke – Bank of England

Derek Halpenny – MUFG

Shiv Khetia – Bank of England

Apologies

Andrew Grice – Bank of England

Andrew Rogan – UK Finance

Boyd Winston – JP Morgan

Joe Halberstadt – SWIFT

Mike Irwin – XTX Markets

Terri van Praagh – Northern Trust