Change to the Non-Investment Products Code in Relation to Undisclosed Principal Trading

The Foreign Exchange Joint Standing Committee (FX JSC), for which the Bank of England provides a Chair and Secretariat, today announces a change to the Non-Investment Products (NIPs) Code affecting the wholesale foreign exchange market in the UK.
Published on 28 May 2003

The change concerns undisclosed (or unnamed) principal trading, which typically occurs when a fund manager deals with a market counterparty but does not disclose full details of the client (i.e. the principal) for whom it is dealing, because the client wishes to preserve anonymity in the market. Financial institutions trading with undisclosed principals are potentially unable to assess their credit exposures and legal risks.

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