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1 March 2023
Time: 1pm – 3pm | Location: In-person – Bank of England, Threadneedle St, London, EC2R 8AH
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. The minutes of the 15 November 2022 meeting were agreed, with no comments raised by members. 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. 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. 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. 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. 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. 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. Steve Forrest (UBS) gave an update on the anonymised survey GFXD undertook on Russian Ruble claims. 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. The members and the Secretariat thanked Mr Blythe for his contributions to the Committee. 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 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 Andrew Harvey – GFXD Anna Chadderton – Goldman Sachs (Observer) Daniel Fajuke – Bank of England Derek Halpenny – MUFG Shiv Khetia – Bank of England Andrew Grice – Bank of England Andrew Rogan – UK Finance Boyd Winston – JP Morgan Joe Halberstadt – SWIFT Mike Irwin – XTX Markets Terri van Praagh – Northern TrustMinutes
Minute 1 – Welcome and Apologies
Minute 2 – Minutes of the November Meeting
Minute 3 – Market Update
Minute 4 – FXJSC Turnover Survey
Minute 5 – GFXD 2023 Agenda and Securities T+1 Settlement
Minute 6 – SIMEX 22 Update
Minute 7 – FCA Update
Minute 8 – Forward Agenda
Minute 9 – Education & Outreach
GFXD Update
CLS Update
Minute 10 – Any Other Business
Attendees
FXJSC Secretariat
Guest attendees
Apologies
