Bank Of England: Minutes Of The London FXJSC Operations Sub-Committee Meeting – 19 June 2024

Minutes

Item 1 – Welcome and Apologies

James Kaye (Chair, HSBC) welcomed two new members to the Committee, Daniel Hoye (NatWest Markets) and Mark Codling (Deutsche Bank). The Chair also welcomed guests Adam Conn (Baillie Gifford), Andrew Harvey (Global Financial Markets Association), Lia Oyman (Franklin Templeton), Nigell Todd (Fidelity International) and Sarah Healey (Fidelity International). The Chair also welcomed alternates Aparna Shrivastava (Morgan Stanley), Dean Chard (SWIFT), and Emily Martin (Bank of England).

The Chair noted apologies from Andrew Batcher (LCH), Andrew Grice (Bank of England), Claire Forster-Lee (Morgan Stanley) and Joe Halberstadt (SWIFT).

Item 2 – Minutes of the February Meeting, feedback from the March Main FXJSC Committee meeting and Terms of Reference Review

The minutes from the 28 February 2024 meeting were agreed by Committee members.

The Chair provided an overview of the March Main Committee meeting^footnote[1] noting that there had been an update on the FX Global code review, and a discussion on the evolution of custody FX.

The Chair noted that the Terms of Reference (ToR) had been updated following the annual review. The updates were to include the monitoring of actual and emerging operational risks as a key aim of the Committee and to streamline the membership process. It was noted that the updated ToR would be circulated to members after the meeting for comment.

Item 3 – North American Transition to T+1 Securities Settlement

The Chair opened the discussion on the impact on FX markets of the North American transition to T+1 securities settlement, which had been implemented at the end of May 2024. The Chair noted that overall, feedback had been positive with no significant issues identified. This view was affirmed by guest attendees, noting that they had also seen limited impact from the migration.

Committee members noted that the success had partly been due to the high levels of preparation and coverage, including through increased operating hours. Although the Committee cited some caution as firms reverted to business-as-usual.

The impact of the migration to T+1 securities settlement would continue to be monitored.

Item 4 – Investment Association update

Alex Chow (Investment Association (IA)) noted that in addition to the North American transition to T+1 securities settlement, the IA had considered the challenges European Market Infrastructure Regulation (EMIR) reporting posed for buy-side firms. The IA had also established a focus group on FX netting. The IA were also partnering with the FIX Trading Community to promote the use of standardised reject codes.

Item 5 – CLS update 

John Hagon (CLS) noted that CLS ecosystem performance had improved markedly in the past 5-6 months.  

Preparations for the Alternative Processing Site (APS) were progressing at pace, and the APS was expected to be operationally ready in Q3 2024. A market-wide test of the APS would occur at the end of the year.

Regarding the June International Monetary Market (IMM) settlement day on 20 June, immediately following Juneteenth Day in the US, Mr Hagon noted that CLS were forecasting a settlement volume of 4 million sides and a settlement value of circa £19 trillion, adding that the projected volume was well within proven system capacity.   

Item 6 – GFXD update

Steve Forrest (UBS) provided an overview of the most recent GFMA FX Operations Committee meeting. There was a discussion on the North American move to T+1 securities settlement, and the April FX Settlement survey round. Mr Forrest further noted that the committee had also discussed the June IMM day, topics to cover in 2025, and agreed to establish a new resiliency-focused group.

Item 7 – FCA update

Oliver McCausland (FCA) noted that the FCA were in the pre-election quiet period. Essential business would continue but no major consultations or rule changes would be conducted during this period. It was also noted that the update to UK EMIR derivative reporting, known as EMIR Refit, would go-live in September 2024 and the FCA had published Q&As to support implementation.

Item 8 – FX Settlement Survey

Natalie Lovell (Bank of England) gave a brief overview of the April 2024 FX Settlement Survey. It was noted that the October 2024 survey round would provide a further opportunity for other central banks to adopt the new approach for collecting FX Settlement data ahead of the 2025 BIS Triennial survey.^footnote[2]

Item 9 – Update on FX Settlement Crisis Playbook

Gail Smith (Deputy Chair – RBC Capital Markets) and Kerry Peacock (Deputy Chair – MUFG) gave an update on the FX Settlement Crisis Playbook. The playbook would be revised to be a best practice, principles-based document, and would include a non-exhaustive list of considerations for firms to consider in the event of an outage of a critical FX settlement system. A draft of the proposed playbook would be circulated to committee members for comment.

Item 10 – Any Other Business

The Chair noted that Paula Kenee (Northern Trust) would join the September meeting as an observer. It was noted that the September meeting would be hosted by Morgan Stanley at Canary Wharf.

Attendees

Aaron Mills – Citadel

Alex Chow – Investment Association

Anna Chadderton – Goldman Sachs

Daniel Hoye – NatWest Markets

Fiona O’Riordan – Citi

Gail Smith (Deputy Chair) – RBC Capital Markets

Gavin Platman – Insight Investment

James Andrews – JP Morgan

James Kaye (Chair) – HSBC

John Hagon – CLS

Kerry Peacock (Deputy Chair) – MUFG

Mark Codling – Deutsche Bank

Oliver McCausland – FCA

Steve Forrest – UBS

FXJSC Secretariat

Eleanor Garrett – Bank of England

Joe Hearn – Bank of England

Matthew Hartley (Legal Representative) – Bank of England

Natalie Lovell – Bank of England

Zish Jooma – Bank of England

Alternates

Aparna Shrivastava – Morgan Stanley

Dean Chard – SWIFT

Emily Martin – Bank of England

Guest attendees

Adam Conn – Baillie Gifford

Andrew Harvey – Global Financial Markets Association

Lia Oyman – Franklin Templeton

Nigell Todd – Fidelity International

Sarah Healy – Fidelity International

Apologies

Andrew Batchelor – LCH

Andrew Grice – Bank of England

Claire Forster-Lee – Morgan Stanley

Joe Halberstadt – SWIFT