The foreign exchange market, also known as forex or FX, is a global decentralized market for the trading of currencies. The Foreign Exchange Dealers Coalition (FXC) is an advocacy group comprised of banks and other large forex dealers that aims to promote fair and transparent currency trading practices worldwide. This article will provide an in-depth look at the FXC, including its history, organizational structure, initiatives, and impact on forex markets.

Introduction to the Foreign Exchange Dealers Coalition

The Foreign Exchange Dealers Coalition was established in 2017 in London, UK and currently has 15 members consisting of major forex dealers such as HSBC, Deutsche Bank, and Citibank. The group came together in response to misconduct investigations in currency trading, seeking to restore trust in the wholesale FX marketplace.

The FXC is an independent, member-funded organization without regulatory authority. Its main activities involve sponsoring market research, issuing policy recommendations, and publishing the FX Global Code, a set of guidelines for ethical behavior in forex trading. The overarching mission is to create open and fair markets that operate with the highest standards of integrity.

History Behind the Formation of the FXC

In the years leading up to the FXC’s founding, forex markets were shaken by a series of scandals related to market manipulation and lack of transparency. Traders at major banks were found to be coordinating trades and sharing confidential client information in online chatrooms, disadvantaging other market participants. These behaviors violated ethics and in some cases, local laws.

Regulators imposed over $10 billion in fines on banks for currency misconduct. Public trust in forex markets deteriorated significantly. To help repair the damage and prevent future abuse, the FXC was launched by leading forex dealers as a self-regulating group. The coalition demonstrated the industry’s commitment to change and desire to uplift standards across the board.

Organizational Structure and Membership

The FXC maintains a small organizational footprint to allow for nimble operations. Leadership consists of a Chairman and Chief Operating Officer. The Chairman is appointed by member firms on a rotational basis every two years. The board of directors has senior representatives from each member organization.

Membership is open to wholesale market makers and liquidity providers who actively trade G10 and other major currencies. As of 2023, members include Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, MUFG Bank, RBC Capital Markets, Standard Chartered, State Street Global Markets, and UBS.

The diverse membership creates a collaborative environment for developing ethical standards. Members pay annual dues to fund operating costs. Dues are calculated based on the firm’s market share in order to assess them equitably. Membership fees and size are not disclosed publicly.

Efforts and Initiatives of the Foreign Exchange Coalition

The FXC engages in a range of initiatives aimed at enacting positive change in currency markets globally. Some of their key focus areas include:

Publishing the FX Global Code

The flagship project of the FXC was creating the voluntary FX Global Code in 2017, updated in 2020. The Code establishes 55 principles for ethics and good practice in the forex industry spanning areas like ethics, governance, execution, information sharing, and risk management. As of 2023, over 24,000 individuals and 180 institutions worldwide have signed statements of commitment to the Code.

Market Research and Education

The FXC regularly publishes research on themes like liquidity, market structure, and trading behaviors to keep the industry informed on emerging trends. It also seeks to educate the public on market dynamics through primers, conference talks, and media engagement.

Regulatory Outreach

The coalition communicates frequently with central banks and financial regulators worldwide to provide guidance on policy reforms from the dealers’ perspective. It aims to align regulations across borders and advocate for consistency.

Updating Standards

FXC reviews the FX Global Code annually to determine where principles could be clarified or expanded based on evolving market conditions. It also works to integrate the Code’s guidance into firms’ internal training and compliance processes.

Sanctions for Misconduct

While it lacks enforcement power, the FXC encourages its members to punish Code violations within their institutions. It also pressures members to conduct thorough investigations if misconduct emerges and share findings industry-wide to prevent recurrences.

Impact of the Foreign Exchange Dealers Coalition

Since its inception, the FXC has effected positive change in restoring trust and upholding ethics in forex markets. Some of its key achievements include:

  • Mainstreaming the FX Global Code as the benchmark for principles-driven currency trading globally
  • Improving coordination among forex dealers to align standards and address issues collaboratively
  • Increasing transparency in operations and reforming behaviors like sharing confidential data in dealer chatrooms
  • Curbing misconduct through peer pressure, sanctions for ethics breaches, and emphasis on continual training

While progress has been made, work remains to fully transform culture and keep pace with an evolving market. The FXC provides an optimistic model of the industry’s ability to self-monitor and place principles over profits. With sustained effort from leaders and personnel, it can achieve its vision of open, liquid markets founded on integrity.

The Future of the Foreign Exchange Dealers Coalition

Looking ahead, the FXC aims to further expand adoption of the Code globally and ensure it remains relevant over time. Priorities include:

  • Universal adoption – Every major forex dealer has signed on, but smaller participants remain outside. Bringing all currency traders and services under the Code’s umbrella is a future goal.
  • Individual accountability – Practices are still uneven, with some traders adhering more than others. Instilling discipline across all personnel is key.
  • Technology ethics – As algorithms, AI and machine learning shape markets, establishing standards for these tools will be important.
  • Enhanced transparency – While improved, transparency can still progress through measures like anonymous transaction reporting.

The FXC will also adapt as needed to address new developments in the forex ecosystem. With continued coordination and vigilance, it can drive positive momentum toward fair, orderly markets built on ethics and integrity.


The Foreign Exchange Dealers Coalition emerged during a period of ethical crisis for currency markets globally. By bringing top dealers together to collaborate on solutions, it has made significant strides in restoring faith and upholding robust principles for trading. Through guidelines like the FX Global Code, market monitoring, and disciplinary measures, the FXC represents a promising self-regulating model. While progress has occurred, achieving a universally principled, transparent forex marketplace remains an ongoing endeavor. Ultimately, the FXC seeks to promote fair dealing for all and provide the infrastructure for open, honest markets to thrive moving forward.