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A Guide to Achieving

Best Practice in Foreign Exchange


Through Automation

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

Table of Contents

1. Introduction ................................................................................................... 3
1.1 Controlling Risk in Todays Environment................................................................................. 3
1.2 How Adoption of FXall Promotes Best Practice ....................................................................... 4
1.3 Summary of Key Operational & Compliance Benefits from using FXall.................................... 6

2. Introduction to FXall ...................................................................................... 7


3. Best Practices Review..................................................................................... 8
3.1 Pre-Trade Preparation and Documentation............................................................................. 8
3.2 Trade Capture ....................................................................................................................... 10
3.3 Confirmation & Netting ......................................................................................................... 12
3.4 Settlement ............................................................................................................................ 15
3.5 Accounting / Financial Control ............................................................................................. 17
3.6 General Practices.................................................................................................................. 19

4. FXalls Implementation of Best Practices ..................................................... 24


Appendix 1: How FXall Automates Customers Workflows............................... 26
A.1 How Does it Work? ............................................................................................................... 26
A.2 Front-Office .......................................................................................................................... 26
A.3 Middle & Back-Office ............................................................................................................ 27
A.4 Reducing Settlement Risk..................................................................................................... 27

Appendix 2: Complete Listing of Best Practices from the Foreign Exchange


Committee ........................................................................................................ 28
Appendix 3: List of Related Documents & Websites......................................... 30

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

1. Introduction
Operational risk is the risk of direct or indirect loss resulting from inadequate or failed
internal procedures, people, and systems, or from external events.1 Foreign Exchange
Committee, March 2003

Although thousands of dealers, in centres all over the world, are conducting their daily
business in a highly professional way and under the highest ethical standards, the
fraudulent actions of these individualshave cast a dark cloud over the entire industry.
ACI. From a statement to the press, 24th November 2003

Focus: Is there an honest man on Wall Street? FBI agents arrested 48 New York
currency traders last week in the lastest scandal to rock the financial world The Times,
London, 23rd November 2003

John McCarthy, director of foreign exchange trading at ING Capital Markets in New York
and a 24-year veteran of the industry, said, "In the long run, the foreign-exchange
market crosses every border and, as a consequence, regulating it would be a
monumental and probably impossible task. A further consequence of this might be to
move transactions to electronic platforms where transparency is more fully recognized."
Reuters, From Fraud Is Easy in Big, Lightly Regulated Forex Market, 19th November
2003

The pressure has never been greater on firms trading foreign exchange to ensure that
they operate to the highest standards. Clients and banks must move to tighten their
internal controls and procedures in order to ensure that they comply with local and
international governance and professional market standards.

1.1 Controlling Risk in Todays Environment


Controlling operational risk means knowing exactly the who, what, when, where and how
details regarding any individual transaction.
Reducing operational risk is a result of planning and implementation of procedures,
processes and systems to ensure that the proper controls are in place and can be
constantly monitored. Firms that trade FX must maintain confidence in the market by
implementing solutions that will provide the appropriate safeguards to control and
manage risk while at the same time preserving a fair, transparent and efficient
marketplace.2
1

The Foreign Exchange Committee, Management of Operational Risk in Foreign Exchange. (New York: March
2003), p.3
2
From a statement by the Foreign Exchange Committee (New York: 1st December 2003).

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

On 1st December 2003 the the Foreign Exchange Committee3 stated that the Committee
will examine what measures can be taken [that] might include enhanced controls,
contemporaneous time-stamping of trades and straight through processing. The
Committee also recommended that all market participants assess their own operations
with a view to strengthening internal controls and ethical standards where necessary4
Trading FX electronically on FXall provides risk control tools as built-in features. Users
find access to competitive rates with a full suite of professional dealing tools while
benefiting from efficiencies gained when trading in an automated environment. FXall
provides an automated process for trade execution and matching and confirmation while
carefully segmenting the front, middle & back office functions. In addition, FXall offers
QuickConnect, an automated tool providing full connectivity, or STP, for execution and
confirmation, as another means of minimising risk.

1.2 How Adoption of FXall Promotes Best Practice


The product suite provided by FXall can help firms implement Best Practices as put
forward by the Foreign Exchange Committee. This document will broadly explore those
Best Practices and set-out how FXall can assist with the implemenation of Best Practices
by providing the quality management and audit tools to ensure that your employees are
complying with your firms trading policies and mandates.
There are other Best Practice or Code of Conduct manuals published by the Bank of
England and the ACI (The Financial Markets Association) and where appropriate,
reference will be made to the recommendations of these organisations as well.

The Foreign Exchange Committee is convened by the Federal Reserve Bank of New York and is composed of
representatives from major financial institutions involved in the foreign exchange markets. The Foreign
Exchange Committee and the Federal Reserve Bank of New York do not endorse any particular automated
dealing system.
4
From a statement by the Foreign Exchange Committee (New York: 1st December 2003).

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

In the table below we list the specific Best Practices from the Foreign Exchange
Committee where FXall has a clear role in helping firms implement Best Practices. A
complete listing of Best Practices is available in Appendix 2.
Foreign
Exchange
Committee
Best Practice
No.
FXC no. 4
FXC no. 5

Pre-Trade Preparation and Documentation


Agree upon Trading and Operational Practices
Agree upon and Document Special Arrangements

FXC
FXC
FXC
FXC
FXC
FXC
FXC

Trade Capture
Enter Trades in a Timely Manner
Use Straight Through Processing
Use Real-Time Credit Monitoring
Use Standing Settlement Instructions
Operations Should Be Responsible for Settlement Instructions
Review Amendments
Closely Monitor Off-Market Transactions

no.
no.
no.
no.
no.
no.
no.

6
7
8
9
10
11
12

FXC no. 13
FXC no. 14
FXC no. 17
FXC
FXC
FXC
FXC
FXC

no.
no.
no.
no.
no.

18
19
21
23
24

FXC
FXC
FXC
FXC

no.
no.
no.
no.

25
26
27
28

Confirmation
Confirm and Affirm Trades in a Timely Manner
Be Diligent When Confirming by Non-secure Means
Institute Controls for Trades Transacted through Electronic Trading
Platforms
Verify Expected Settlement Instructions
Confirm All Netted Transactions
Confirm All Block Trades and Split Allocations
Automate the Confirmation Matching Process
Establish Exception Processing and Escalation Procedures
Netting
Use On-Line Settlement Netting Systems
Confirm Bilateral Net Amounts
Employ Timely Cut-offs for Netting
Establish Consistency between Operational Practices and
Documentation

FXC no. 31
FXC no. 34

Settlement
Use Automated Cancellation and Amendment Facilities
Understand the Settlement Process and Settlement Exposure

FXC
FXC
FXC
FXC

no.
no.
no.
no.

41
42
43
44

Accounting/Financial Control
Conduct Daily Position and P&L Reconciliation
Conduct Daily Position Valuation
Review Trade Prices for Off-Market Rates
Use Straight Through Processing of Rates and Prices

FXC
FXC
FXC
FXC

no.
no.
no.
no.

48
53
55
56

FXC
FXC
FXC
FXC

no.
no.
no.
no.

57
58
59
60

General Best Practices


Ensure Segregation of Duties
Control System Access
Use Internal and External Operational Performance Measures
Ensure That Service Outsourcing Conforms to Industry Standards
and Best Practices
Implement Globally Consistent Processing Standards
Maintain Records of Deal Execution and Confirmations
Maintain Procedures for Retaining Transaction Records
Develop and Test Contingency Plans

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

1.3 Summary of Key Operational & Compliance Benefits from using


FXall
Action

Online Trading

Telephone

Request for Quotes

Full audit trail of trade


requests. Reports monitor
quote performance of
providers which helps
demonstrate fulfillment of
fiduciary responsibility to
trade at best price.
Full audit trail of trade
execution, username, date &
time-stamped.
Immediate, accurate
update of trade details via
STP QuickConnect
facilitates real-time credit
monitoring.
STP QuickConnect
interface reduces manual
errors and provides full
audit trail. Allocation details
can be provided pre-trade to
minimize risk of fraud. Post
trade allocations are time
stamped.
Full audit trail of trade
amendment. Firms can
restrict access to these
post-trade functions by
username.
Use FXalls end-of-day rates
for Daily P&L valuation from
an unbiased source.
SWIFT based confirmation
and settlement messaging
with banks. Full audit trail
and STP functionality
available.
Automated Give-ups
between customer,
executing bank and prime
broker. Full audit trail and
STP functionality available.
SSIs automatically applied
to trades. Non-standard
SIs have full audit trail.

Taped conversations only.

F
R
O
N
T
O
F
F
I
C
E

Log all Completed Trades


Monitor Counterparty Credit
Limits

Trade Allocations
M
I
D
D
L
E
O
F
F
I
C
E

Post-trade amendments

Daily Mark-to-Market
Trade Confirmations

B
A
C
K
O
F
F
I
C
E

Prime Broker Give-ups

Standing Settlement Instructions


Database
3rd Party Confirmations

Fully automated via SWIFT


with full audit trail.

Copyright 2004 FX Alliance, LLC. All rights reserved.

Manual entry by trader into


deal capture system.
Delayed due to manual
booking of transaction.

Manual entry by trader into


deal capture system.
Potentially unsecure
methods of communicating
allocations.

Taped convesations only.


Manual entry by trader into
deal capture system.
3rd Party independent
provider required.
Taped conversations only.
Paper-based trade records.

Taped conversations only.


Paper-based trade records.

Paper-based data records


only. No automated
tracking of non-standard
SIs.
Paper-based trade records.
No audit trail.

BEST PRACTICES USING FXALL |

2. Introduction to FXall
Since its inception, FX Alliance (FXall) has worked closely with leading corporate, financial
institutions and asset management firms to develop functionality that encompasses their entire
workflow. Simultaneously, FXall has expanded its network to include most of the major FX and
custodian banks. FXall focuses on adding value throughout the entire dealing workflow with a full
suite of products offering an end-to-end solution for all users.
The FXall suite has three product lines that address trading and processing needs. Each product
addresses a key aspect of the trading workflow:

FXall Trading

QuickTrade - real-time competitive


quotes from multiple counterparties
simultaneously

QuickBatch trading for efficient execution


of complicated trades with multiple
allocations or legs

Choice of pre- or post-trade allocations

Settlement Center

Diagram 1: FXalls product suite

SWIFT based confirmation and settlement


messaging with banks

SWIFT based notifications to custodians

SSI Database simplifies settlement


administration

CLS compatible for customers using thirdparty settlement

Full automation for prime brokerage give


ups and reverse give ups

QuickConnect

Fully automated STP into front- and backoffice systems

Trading API allows customers to


incorporate execution directly into their
Treasury and Order Management Systems

The FXall Trading and Settlement Center products can be used independently. For example, an
asset manager can use FXall for execution, but continue to use its existing processes for
confirmation and settlement preparation. Or the asset manager can adopt Settlement Center to
streamline its middle and back-office, but continue to use a combination of execution methods
telephone, FXall, etc.
Role-based entitlements and a full audit trail for all FXall functions ensure that activities are
properly controlled with maker/checker functionality. The audit trail record includes winning and
losing quotes, changes in SSIs, and indicative prices.
However, the best synergies, controls and operational efficiencies are achieved when the customer
adopts both products.
To learn about how FXall automates customers workflows, please see Appendix 1.

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

3. Best Practices Review


This section reviews in detail how FXall can ensure that FX market participants can meet
the Best Practice guidelines as defined by the Foreign Exchange Committee.

3.1 Pre-Trade Preparation and Documentation


Best Practice no. 4: Agree Upon Trading and Operational Practices
From the FXC Guide

Trading and operational practices should be established with all


counterparties.
The amount of trading activity with fund managers and investment
advisors has escalated in recent years. These clients transact in block or
bulk trades, which are then split into smaller amounts and entered into
specific client accounts managed by fund managers or investment
advisors. Until a block or bulk trade is properly allocated to the specific
accounts of each fund entity, inaccurate credit risk management
information may exist. A bank should strongly encourage clients to
confirm bulk trades as soon as possible after the trade is executed.

How FXall Solves this


Issue

In addition, a bank should request that fund managers provide them with
the split information on the trade date for all trade types so that the
bank's credit information can be updated as soon as possible.
FXall has two types of automated block trading capabilities, pretrade and post-trade allocations. Both are optimized to ensure
implementation of Best Practice.
With automated pre-trade allocations, the trader can complete all the
executions by clicking a single button. From the counterparty banks
perspective, this is a more efficient method of processing block trades
and facilitates real-time credit checking before the deal is concluded.
Post-trade allocations are also available for trades executed over FXall or
the telephone. For phone trades, counterparties can agree to the spot
rate over the telephone, and then use Batch Trading to send the account
breakdown for the deal. The provider adds forward points if required
and, following review by the trader, the deal is booked electronically by
both parties. This method combines the relationship advantages of the
telephone with the straight through processing efficiencies of electronic
execution.
With either approach to automated allocations, all activities include a full
audit trail with each action stamped by time, date, and username.

Diagram 2: Batch Trading on FXall

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

Best Practice no. 5: Agree Upon and Document Special Arrangements


From the FXC Guide

If, in the course of the documentation set-up and establishment


of trade and operational practices, it becomes clear that a
counterparty requires special arrangementssuch as third-party
payments or prime brokerage servicethose arrangements
should be agreed upon and documented in advance of trading.
Prime brokerage arrangementsmay also involve special occasions
for misunderstanding the respective rights and obligations of the various
parties. Such arrangements should be evidenced by written agreements
(prime broker and dealer, prime broker and customer, dealer and
customer) that have been reviewed and approved by legal counsel.

How FXall Solves this


Issue

FXall facilitates the systematizing of special arrangements


between counterparties relating to third-party payments, prime
brokerage or any other agreement. The customer can ensure
that only administrative staff have access to these hard-coded
functions to minimise risk.
As an example, FXall has both front and back-office capabilities
for prime brokerage arrangements:
FXall Trading allows entitled users to choose the prime broker when
conducting a trade via QuickTrade.
FXalls Settlement Center electronically manages prime broker give-ups
between the three parties in the relationship. The prime broker will be
asked to actively Accept or Reject a deal done between a client and
an executing bank.
Participants in a prime brokerage relationship may choose to mandate
the use of FXalls Settlement Center for communicating give-ups in their
trading documentation. FXall can provide a completely automated realtime give-up process that is agreed to by all parties as part of the prime
brokerage agreements.

Diagram 3: From the FXall Prime Broker Getting Started Guide

Copyright 2004 FX Alliance, LLC. All rights reserved.

BEST PRACTICES USING FXALL |

3.2 Trade Capture


Best Practice no. 7: Use Straight Through Processing
From the FXC Guide

When Sales & Trading and Operations use separate systems,


electronic feeds should automatically feed all deals, adjustments,
and cancellations from one system to the other. Ideally, the
transaction data should also be carried straight through for
posting to the general ledger, updating credit information,
generating money transfer instructions, and feeding nostro
reconciliation systems.
To ensure timely processing by Operations and eliminate potential errors
that can occur if trades are reentered into the Operations systems,
straight through processing should exist between Sales & Trading and
Operations. Such a link should move deals, adjustments, and
cancellations to the Operations system as soon as they are finalized by
Sales & Trading.

How FXall Solves this


Issue

See also Best Practice no. 8: Use Real-time Credit Monitoring.


STP facilitates real-time transfer of trade data to allow for counterparty
credit limits to be monitored. And, see also Best Practice no. 17:
Institute Controls for Trades Transacted through Electronic
Trading Platforms.
To gain the greatest benefits from electronic trading you need to
automate the flow of data between FXall and your own systems.
This eliminates the time consuming and inaccurate task of manual data
entry. To make this automation possible, FXall has developed
QuickConnect, a comprehensive straight through processing solution.
FXalls STP solution covers the full deal lifecycle, covering pretrade, through dealing, to confirmation and settlement
preparation. However, our solution is flexible, allowing you to choose
which processes to automate. This allows you to concentrate your
energy where your particular business will see the greatest return.
Finally, we offer several different technologies for the integrations
themselves, meaning that we can connect to almost any trading system,
from spreadsheets, through to proprietary and vendor supplied systems.

Diagram 4: System Integration using FXall QuickConnect

Copyright 2004 FX Alliance, LLC. All rights reserved.

10

BEST PRACTICES USING FXALL |

Best Practice no. 9: Use Standing Settlement Instructions


From the FXC Guide

Standing Settlement Instructions (SSIs) should be in place for all


counterparties. Market participants should issue new SSIs, as well
as any changes to SSIs, to each of their trading partners in a
secure manner. For banks, the preferable method is through an
authenticated medium such as SWIFT messages.
SSIs allow for complete trade details to be entered quickly, so that the
confirmation process can begin as soon after trade execution as possible.
In general, when SSIs are in place, it is possible to take full advantage of
straight through processing because Operations may not have to
manually intervene in the transaction during the settlement process. SSIs
also allow for payments to be formatted properly and for readable SWIFT
codes to be issued. If SSIs are not established, Operations must contact
the counterparty to obtain settlement instructions and the deal record
must subsequently be changed to reflect these settlement instructions.
The extra work involved in inputting, formatting, and
confirming settlement instructions increases the opportunity for errors in
settlement, making SSIs important for risk management and efficiency.
See also Best Practice no. 10: Operations Should be Responsible
for Settlement Instructions, Best Practice no. 11 Review
Amendments and Best Practice no. 18 Verify Expected Settlement
Instructions.

The Model Code ACI


the Financial Markets
Association

The use, where possible, of Standardised Settlement Instructions (SSIs),


helps to eliminate costly mistakes.

How FXall Solves this


Issue

FXall has developed a full SSI database that provides secure


instruction management for Operations staff. Features include:
Support of SSIs and ad-hoc instructions
Standard instructions can be automatically added
Confirm without settlement instructions and add them later
Creation of new settlement instructions is subject to supervisor
approval
Role-based entitlements and a full audit trail ensure that instructions are
properly controlled with maker/checker functionality. The audit trail
records all changes, approvals and applications of the instructions.
If your firm is already a user of FXall Trading, then you will already have
a person assigned as your internal Entitlements Manager. However, as
part of implementing Best Practices, FXall recommends that you
designate a separate individual as the Settlement Center Entitlements
Manager so as to keep the front and back-office functions separate.

Diagram 5: SSIs on FXall

Copyright 2004 FX Alliance, LLC. All rights reserved.

11

BEST PRACTICES USING FXALL |

3.3 Confirmation & Netting


Best Practice no. 13: Confirm and Affirm Trades in a Timely Manner
From the FXC Guide

Both parties should make every effort to send confirmations, or


positively affirm trades, within two hours after execution and in
no event later than the end of the day. This guideline applies to
trades executed with both external and internal
counterparties. Any exception to this rule should be clearly
documented and approved by Operations management and
compliance staff.
Prompt confirmations are key to the orderly functioning of the marketplace because they minimize market risk and minimize losses due to
settlement errors.
These procedures are meant as practices for executions directly between
two parties. In the case of prime brokerage relationships, (in which one
financial institution extends its credit to a third-party dealing with the
institutions customer), confirmations should be exchanged among the
three parties in addition to the fulfillment of other requirements for
exchanging information (see p. 9 for a review of FXalls Prime Brokerage
capabilities).

The Non-Investment
Products code Bank
of England

Also see Best Practice No. 21, Confirm All Block Trades and Split
Allocations, No. 23, Automate the Confirmation Matching Process,
No. 24, Establish Exception Processing and Escalation Procedures
and Best Practice No. 34 Understand the Settlement Process and
Settlement Exposure.
In all markets, the confirmation provides a necessary final
safeguard against dealing errors. The issue and checking of
confirmations is a back-office responsibility which should be
carried out independently from those who initiate deals.
A confirmation of each deal should be sent out without delay and where
possible electronically.
the prompt dispatch and checking of confirmations is of great
importance. Non-standard settlement instructions should be particularly
carefully checked, and any discrepancies identified promptly upon
receipt, and notified direct to the counterparty

The Model Code ACI


the Financial Markets
Association

The issue and checking of confirmations is a back office responsibility,


which should be carried out independently of those who initiate deals.
Confirmations should be sent out as quickly as possiblethrough and
efficient and secure means

How FXall Solves this


Issue

FXalls Settlement Center is a back-office solution for


electronically managing the deal confirmation lifecycle. FXall
facilitates the hard-coding of details relating to the settlement
process including SSIs and third-party payments.
Every action has a full audit trail and changes to the hard-coded
data cannot be made without supervisor approval.
Settlement Center provides back-office processing used by customers to:
1. Automatically confirm trades with their providers (both on and off
platform)
2. Send settlement instructions
3. Notify custodians and other third parties, and
4. Agree netted settlements.

Copyright 2004 FX Alliance, LLC. All rights reserved.

12

BEST PRACTICES USING FXALL |

Settlement Center sits centrally in the matching and settlement process,


using SWIFT industry standard communication to keep all parties fully in
the picture.5 Depending on your firms capabilities and deal volumes,
your firm has a variety of choices as to the level of automation you can
implement.
Typically the higher the deal volumes (numbers of tickets), the greater
the need is to automate the confirmation and settlement process so as to
eliminate the scope for errors.
However, as an alternative to automated matching, customers can
choose to review and affirm confirmation messages sent in by their
Providers via SWIFT.
FXall currently sends and receives the following SWIFT message types on
behalf of clients using Settlement Center:
MT300
MT304
MT202
MT210

Foreign Exchange Confirmation


Advice/Instruction of a 3rd Party deal
General Financial Institution funds transfer
Notice to Receive

MT320 (Money Market) and MT305 (Plain Vanilla Options) message types
will be added in early 2004.
Settlement Center helps firms formalise their processes and also has a
number of reports available for monitoring each point of the settlement
process. These reports are particularly valuable when managing
settlement risk and understanding which trades may be unresolved at
any given moment in time.

Diagram 6: From the FXall Settlement Center Getting Started Guide

FX Alliance is a member of the SWIFT network and operates its own BIC code.

Copyright 2004 FX Alliance, LLC. All rights reserved.

13

BEST PRACTICES USING FXALL |

Best Practice no. 19: Confirm all Netted Transactions


From the FXC Guide

All transactions, even those that will be netted, should be


confirmed individually.
Netting trades for settlement is an important operational function
because it allows a bank to reduce settlement risk and operational cost.
However, it is still necessary to confirm all transactions individually. If
netted trades are not confirmed individually, trades may be mistakenly
added or removed from the net agreement, which will be difficult to
detect on settlement day. Incorrect netting will distort credit and
settlement risk.
The confirmation of these deals should be performed as it would be in
any other transaction or with the aid of a netting service provider.

The Model Code ACI


the Financial Markets
Association

How FXall Solves this


Issue

See also Best Practice No. 25 Use On-Line Settlement Netting


Systems and No. 26 Confirm Bilateral Net Amounts.
The Model Code recommends the use of netting systems to reduce
settlement and credit risk.
FXalls Settlement Center allows counterparties to combine
multiple payments arising from different deals into a single,
equivalent payment. It calculates bilateral netted amounts and records
agreement with provider for the netted amounts.
Only deals that have been individually matched can be included in
Netting totals. Once net confirmations have been created, they are
then submitted to the counterparty bank for approval.
The default action is for all deals to be netted at once. Clients may
however, choose particular accounts, banks, or currency combinations to
net on an ad-hoc basis.
See also Best Practice No. 27 Employ Timely Cut-offs for Netting
and Best Practice No. 28 Establish Consistency Between
Operational Practices and Documentation. Using a system for
netting is the best way to ensure that your processes are in line with
your documented procedures. Automation of calculated netted totals
and agreement between counterparties of netted amounts facilitates
timely completion of the netting process.

Diagram 7: From the FXall Settlement Center Getting Started Guide

Copyright 2004 FX Alliance, LLC. All rights reserved.

14

BEST PRACTICES USING FXALL |

3.4 Settlement
Best Practice no. 31: Use Automated Cancellation and Amendment Facilities
From the FXC Guide

A bank [or customer] should establish a real-time communication


mechanism . to process the cancellation and amendment of
payment instructions.
A bank [or customer] may need to change or cancel payment
instructions after they have been released to nostro banks. Problems
may arise if this information is not processed in a timely manner.
Amendments occur when an error in the original instruction has been
identified or a counterparty has made a last minute change. Because
execution of the erroneous payment instruction will certainly create an
improper settlement, the bank needs to be sure the amendment is acted
upon so that its nostro balance predictions are accurate. More
importantly, a bank may wish to cancel a payment instruction if it is
reasonably confident that a counterparty may not fulfill its obligation to
pay the counter-currency.
An automated feed from the Operations system will make
communication of amendments and cancellations easier. Such a link
also decreases the chance that a bank will miss the payment deadline
and should prevent incorrect payments from being released.
See also Best Practice No. 14 Be Diligent When Confirming by
Nonsecure Means. Authenticated electronic messaging is the most
secure means of transmitting confirmations. See also Best Practice
No. 12 Closely Monitor Off-Market Transactions

How FXall Solves this


Issue

With FXall, post-trade amendments are processed in the most


secure environment every action is time, date and username
stamped with only authorised users having access to this
functionality. And the full audit trail can be monitored by
compliance staff in real-time.
Customers and liquidity providers can negotiate five different
types of post-trade amendments to deals executed on FXalls
trading platform:
1.

Post Trade Allocations The customer can split a trade across


multiple accounts.

2.

Value Date to Follow The customer can split the trade across
multiple value dates.

3.

Rebook at Average Rate The customer executes a number of


transactions with the same provider. These are then cancelled and
rebooked as a single deal (at the provider-calculated weighted
average execution rate).

4.

Cancel and Rebook The customer submits a general amendment


request to the provider; if agreed, the counterparties potentially
negotiate a new price. The original deal is then cancelled and
replaced by the amended deal.

Back-office Amendments or Cancellations: As discussed in a


previous section, FXall Settlement Center provides the greatest
benefit when full STP is achieved from trade initiation through to
settlement. However, dealers (people) do make mistakes and
upon occasion deals need to be amended or cancelled altogether.

Copyright 2004 FX Alliance, LLC. All rights reserved.

15

BEST PRACTICES USING FXALL |

If the trade has been done off-platform but Settlement Center is being
used for confirmations, then counterparties can amend and cancel within
the back-office environment.
All amendments and cancellations whether done manually or via SWIFT
messaging are captured with a full audit trail and if required, maker /
checker functionality is available.

Diagram 8: Audit Trail detail on Settlement Center

Copyright 2004 FX Alliance, LLC. All rights reserved.

16

BEST PRACTICES USING FXALL |

3.5 Accounting / Financial Control

Best Practice no. 41: Conduct Daily Position and P&L Reconciliation
From the FXC Guide

Daily P&L and position reconciliations should take place between


the Sales & Trading and Operations systems.
Banks that maintain a single system for trade capture data should ensure
that the data source is properly controlled.
See also Best Practice No. 42, Conduct Daily Position Valuation.
Position valuation should be checked against independent price
sources (such as brokers or other banks).
See also Best Practice No. 43 Review Trade Prices for Off-Market
Rates. Trade prices should be independently reviewed to ensure
reasonableness within the market prices that existed on the
trade date.
See also Best Practice No. 44, Use Straight Through Processing of
Rates and Prices. Rates and prices should be fed electronically
from source systems. To eliminate the errors associated with
collecting and rekeying the required rates and prices, a bank [or
customer firm] should establish electronic links from the systems that
source the rates and price information to the position valuation systems.

The Non-Investment
Products code Bank
of England

The Model Code ACI


the Financial Markets
Association

How FXall Solves this


Issue

Principals who engage in trading should undertake regular prudent and


consistent valuation of their mark-to-market trading positions. For many
such positions, quoted prices will be the best guide to a fair valuation.
Screen services, brokers and other third-party providers can all be useful
sources of data.
Ensure timely and accurate risk measurement. Trading positions should
be marked to market on a daily basis by a function independent of
trading. Valuations should be verified against independent sources
wherever possible.
Use FXalls end-of-day rates for daily P&L valuation from an
unbiased source. The FXall Hourly Rates are derived from the FXall
Indicative Quotes feed. FXall's fully integrated liquidity providers deliver
streaming quotes directly from their rate engines to the FXall platform.
FXall uses a proprietary algorithm to blend the contributions into a
single, real-time quote stream. The algorithm identifies and eliminates
out-of-range data to ensure that the FXall real-time quote stream is
accurate and reliable. FXalls rates are market neutral; meaning they
are not biased towards the commercial interest of any single provider
bank.
The FXall Hourly Rates provide a useful tool to members of FXall's global
trading community who perform daily mark-to-market processes
throughout the trading day. FXall posts Hourly Rates for all of the major
market closings to ensure that all customers can benefit from this service
regardless of their location.
Subscribers to FXall's Premium Information Services package can access
a comprehensive list of Hourly Rates for all currency pairs and tenors
that are currently available through the FXall Indicative Quotes Panel. In
addition, subscribers will have access to a full search and download
facility for retrieving historical rates.

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BEST PRACTICES USING FXALL |

Premium Information Services subscribers can also use FXall's


QuickConnect integration services to automatically download the FXall
Hourly Rates directly into their portfolio management systems for use in
marking to market and P&L valuations.
In addition to using FXall rates for valuations, each FXall trade ticket
includes the current market FX rate from the blended quotes facility with
the trade P&L calculated against that market rate. This allows firms to
monitor their providers for rate reasonableness.

Diagram 9: FXall Hourly Rates Screen

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BEST PRACTICES USING FXALL |

3.6 General Practices

Best Practice no. 48: Ensure Segregation of Duties


From the FXC Guide

The reporting line for Operations personnel should be


independent of the reporting line for other business lines (Sales
& Trading, credit, accounting, audit, and so on). For key areas,
Operations management should ensure that an appropriate
segregation of duties exists within Operations and between
Operations and other business lines.
Examples of good practices include:
Precluding individuals from having both trading and confirmation /
settlement responsibilities concurrently
Precluding Sales & Trading personnel from issuing and authorizing
payments
Not allowing established procedures to be overridden without
Operations management's consent
Separate database functions between Sales & Trading and Operations

How FXall Solves this


Issue

FXall has been designed to ensure a complete segregation


between front, middle and back-office duties. FXall recommends
that you have two entitlements managers designated one for managing
front and middle-office trading / support functions and one for backoffice settlement and confirmation functions.
The process of setting up users is controlled by the customer. The FXall
administrator will set up a customer entitlements manager, who is a
customer employee responsible for setting up additional users with
appropriate entitlements in the application. The front-office customer
entitlements manager also entitles specific sub-accounts to trade with
specific banks. The trading application incorporates these account-level
entitlements in the aggregation, netting and RFQ functions.
The Settlement Center entitlements manager will be in charge of all the
administrative set-up functions relating to the use of Settlement Center.
Responsibilities include assigning roles to SC users (e.g., maker,
checker) and creating / maintaining mapping between accounts and bank
branches (Settlement Entity mapping).

Diagram 10: Full Maker / Checker capabilities built in for compliance

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BEST PRACTICES USING FXALL |

Best Practice no. 53: Control System Access


From the FXC Guide

Users of a system (for example, Operations, Sales & Trading)


should not be able to alter the functionality of production
systems. Developers should have limited access to production
systems, and only in a strictly controlled environment. Each
system should have access controls that allow only authorized
individuals to alter the system and/or gain user access. Functionspecific user access "profiles" are suggested.
Access to production systems should only be allowed for those
individuals who require access in order to perform their job function.
When creating user access profiles, system administrators should tailor
the profile to match the user's specific job requirements, which may
include "view only" access. System access and entitlements should be
periodically reviewed, and users who no longer require access to a
system should have their access revoked. Under no circumstance should
Operations or Sales & Trading have the ability to modify a production
system for which they are not authorized.

The Model Code ACI


the Financial Markets
Association

Specific and stringent access controls should also cover treasury IT


systems equipment and confidential information.

How FXall Solves this


Issue

Application Security: Each FXall user has a single FXall user ID


and password. FXall also uses IP address filtering to ensure
message traffic occurs between known entities.
The process of setting up users is controlled by the customer organisation (see Best Practice no 48 above, Ensure Segregation of
Duties).
During the onboarding process, each user sets up an authentication
phrase (e.g., mother's maiden name) that is used to authenticate the
user with the FXall customer service desk. When a user first logs into
FXall, they are forced to change their password.
Five consecutive invalid password authentication attempts in 24 hours
results in a user account being locked out. The FXall administrator must
reset accounts that have been locked out.
Confidentiality and Encryption:
The Secure Socket Layer (SSL) protocol is used to encrypt network
communication for all sensitive traffic. 128-bit encryption key lengths
are the standard key length for critical applications, including login,
trading and reporting. VeriSign global site certificates are used for all of
these applications, which allow all supported browsers to use 128-bit
encryption, regardless of whether they support 128-bit encryption
natively.
Security Audit: SAS 70
FXall has received from its independent auditors an American Institute of
Certified Public Accountant's (AICPA) Statement on Auditing Standards
No. 70 (SAS 70) report. The internationally-recognized SAS 70 report
examines, through an independent third-party assessment process, the
adequacy of controls surrounding the FXall Trading environment.
The SAS 70 is the industry standard for security competency for financial
e-commerce websites.
Security Monitoring:
FXall deploys a variety of monitoring tools and actions to further protect
trading. Intrusion detection tools provide real-time and historical

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BEST PRACTICES USING FXALL |

monitoring to foil any known attack. Ongoing security auditing and


assessment tools ensure FXall systems remain properly configured to
identify and correct evolving marketplace vulnerabilities.
FXall engages independent security consultants to perform extensive
ethical hacking tests of the FXall network, systems and applications.

Best Practice no.55: Use Internal & External Operational Performance Measures
From the FXC Guide

Operational performance reports should be established to clearly


measure and report on the quality of both internal and external
(outsourced) operational performance. The report measurements
should focus on operational efficiency and controls, and be
reviewed on a regular basis by both Operations and Sales &
Trading management.
Operational performance reporting should contain quantifiable
performance metrics at the levels of detail and summary, and indicate
the status of operational activities. These reports should serve to control
and proactively monitor risk and performance.

How FXall Solves this


Issue

See also Best Practice no. 56: Ensure That Service Outsourcing
Conforms to Industry Standards and Best Practices.
FXall provides a Relationship Management Advisor (RMA) report
which allows firms to monitor their FXall statistics. The RMA
provides:

A summary of a firms volume done on FXAll over any time


period

A breakdown by requests (RFQs) sent, answered and dealt in


total

How much business the bank has the opportunity to win and how
much it is actually given

The average time it takes for each bank to make a quote


Provider banks and client firms can use the RMA to monitor activity and
ensure that quality performance is reached.

Diagram 11: Example of the Relationship Management Advisor Report

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BEST PRACTICES USING FXALL |

Best Practice no. 58: Maintain Records of Deal Execution and Confirmations
From the FXC Guide

Banks [and counterparties] should maintain documentation


supporting the execution of foreign exchange trades. Such documentation should provide a sufficient audit trail of the events
throughout the deal execution, trade, and validation process. This
documentation may be in the form of written or electronic
communication, a tape recording, or other forms evidencing the
agreement between the parties.
The length of time that a bank keeps records (which may be left to
management's discretion) depends on the type of business they transact
and may also be subject to local regulations.
It is important to note that trades conducted over the telephone pose
particular risks. The phone conversation is the only bilateral record of
the trade details, at least until the trade is validated through the
traditional confirmation process. Until this confirmation process is
completed, market participants should establish close controls to
minimize the exposure inherent in such trades.

How FXall Solves this


Issue

See also Best Practice No. 59 Maintain Procedures for Retaining


Transaction Records.
Trade Confirmations:
Every deal is logged instantly, as completed. Once the trade is
executed on FXall, the customer and the liquidity provider confirm and
settle the trades in accordance with current practices either via FXalls
Settlement Center or off-platform. Using Settlement Center, customers
can implement a fully automated confirmation procedure that not only
records and saves a record of the confirmation, but also includes the full
audit trail of every action taken by individual users.
Trade Records:
The system is designed to retain records of a large volume of trades.
Currently, trade history for FXall trade recaps and Settlement
Center confirmations conform to best industry practice; up to
seven years in some jurisdictions.
Reports:
The FXall Reporting module offers clients and providers key reports to
support and enhance their internal processes. Customers have the
ability to access reports from the FXall Portal independently from the
Trading applet to provide greater flexibility on queries and to support
compliance management controls. Reports are available in html, pdf and
csv formats and the frequency can be real time or via scheduler with
notifications upon completion. The type of customer reports include
Daily Activity, Audit Trail and Liquidity Provider Summary reports, with
performance benchmark reporting planned for the future.

Diagram 12: Reports on FXall

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BEST PRACTICES USING FXALL |

Best Practice no. 60: Develop and Test Contingency Plans


From the FXC Guide

Operations and Sales & Trading should develop plans for


operating in the event of an emergency. Contingency plans
should be periodically reviewed, updated, and tested. These
contingency plans should cover both long-term and short-term
incapacitation of a trading or Operations site, the failure of a
system, the failure of a communication link between systems, or
the failure of an internal/external dependency. These plans
should include informing, monitoring, and coordinating
personnel.
Backup sites that can accommodate the essential staff and systems of
Operations and Sales & Trading should be set up, maintained, and tested
on a regular basis. Particularly for Operations, market participants should
consider developing a backup site that relies on a separate infrastructure
(electricity, telecommunications, etc.) and an alternative workforce.
Backup sites should be able to access critical confirmation and netting
systems, key liquidity providers, and other industry utilities.

How FXall Solves this


Issue

See also Best Practice No. 57 Implement Globally Consistent


Processing Standards.
Customers have the full benefit of FXalls substantial Continuity
of Business (COB) investment: in the event of having to deploy staff
to your own back-up operations center, access to FXall for critical FX
trading and settlement functions can still be maintained via a secure
internet connection so that normal processing can still take place.
FXall has established a business continuity plan with procedures to
address intra-day outages as well as loss of data center capability.
FXall has a full secondary technology infrastructure to ensure there is no
single point of failure. In the event of a disaster that eliminates or
significantly degrades processing capability at the primary site in New
Jersey, USA, FXall can move primary processing to Virginia. FXall has
24-hour customer support when markets are open and can function from
any of its global locations.
Recovery plans are tested and updated at least annually to mitigate the
effects of an outage to any portion of FXall operations. These outages
can be a result of natural causes (weather, fire etc.) or infrastructure
issues at the FXall location (flooding, power outage, system failure etc).
FXall will aim to contact its clients and providers about any outages in a
timely manner, informing them of any system interruptions and
alternative contacts and procedures to be used.
The UK SFA (the predecessor to the FSA) reviewed FXalls Business
Continuity Plan as part of FXalls registration application. The application
was approved.

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BEST PRACTICES USING FXALL |

4. FXalls Implementation of Best Practices


FXall has implemented its own corporate governance policies and guidelines for its staff
to ensure that the business meets or exceeds all regulations and Best Practices.
FXall is an independent company with its own board of directors and management team.
Regulatory review
FXall has been reviewed by the UK Securities and Futures Authority and has received
their authorization to conduct business in the UK. This authority has been passported to
other European Union countries under the EUs Investment Services Directive.
FXall has also been approved by the Hong Kong Monetary Authority as a money broker
under the Banking Ordinance with effect from 31st August, 2001.
FXall complies with applicable legal and regulatory requirements in each jurisdiction in
which we operate. In most jurisdictions, including the United States, exemptions from
registration are available for FX activity with institutional customers. We continue to
review the regulatory requirements in additional jurisdictions; the current list of
jurisdictions from which customers may trade is available on our website at
http://www.fxall.com/about/locations.html.
Risk management at FXall
The CFO is responsible for overall risk management. The FXall Security Committee is
responsible for the approval of the Information Security Policy and Programs. The FXall
Security Committee consists of the CTO, the Information Security Officer, General
Counsel, the CFO and the COO.
The FXall Information Security Officer, under the direction of the CFO, supports
information security strategic planning, risk assessment, the development of policy,
programs, mechanisms, metrics, monitoring, and change management. FXall
Information Security is additionally responsible for the physical protection of all FXall
assets, including FXall information, employees, facilities, and equipment. It is FXalls
policy to review and test its security policies and procedures and the security of its
infrastructure and applications periodically, and at least once per year.
FXall does not take any market risk. FXall is not counterparty to any market transactions.
FXall does not maintain any trading accounts for itself or for customers. FXall employees
may not trade FX for their personal accounts.
Support
The trading capabilities are supported by comprehensive reporting and multi-lingual
customer support centers that are staffed 24-hours when markets are open with IT and
FX professionals.
Strongest Industry Backing
FXall enjoys the broadest and deepest industry backing of any FX portal:

FXall was founded by fourteen major international banks (and now has 17 equity
partners) whose substantial equity funding and contributions of liquidity,
marketing support and technical resources represent significant long-term
commitment to FXalls success.

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BEST PRACTICES USING FXALL |

FXalls comprehensive functionality and proven technology have attracted more


than 46 (and growing) liquidity providers, the vast majority of whom are fully
integrated to the platform.

FXall has been recognized many times by FX market participants and its peers by having
won numerous awards including the Euromoney 2003 award for Best Multibank Portal
and #1 Multibank Portal from Global Investor 2003 FX Survey. For more information,
see http://www.fxall.com/about/awards.html .

Copyright 2004 FX Alliance, LLC. All rights reserved.

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BEST PRACTICES USING FXALL |

Appendix 1: How FXall Automates Customers Workflows


A.1 How Does it Work?
The diagram below shows how these products and processes combine to deliver a
workflow that eliminates manual keying and largely automates processing.

Diagram 13: The FXall Workflow

A.2 Front-Office
Through QuickConnect integration, trade requirements are automatically uploaded from
the clients Treasury or Order Management System to FXall.
Depending on the clients operating procedures, trade requirements can be uploaded as
locked orders, ready for execution and flagged with a list of credit-checked banks.
Alternatively these decisions can be left to the trading team.
The trader can choose between different styles of execution to seek the desired balance
of execution speed and price efficiency:
1. Use the competitive trading system to send a Request for Quote (RFQ) to
multiple providers simultaneously. The trader reviews the prices returned and
chooses the winning broker.
2. To quickly execute a large number of deals, use the Batch Trading system to
send several orders simultaneously to a single broker. The trader can complete
all the executions by clicking a single button.
3. Agree the spot rate for the deal over the telephone, and then use the Send
Details function in Batch Trading to send the account breakdown for the deal.
The broker prices any forward points required and, following review by the
trader, the deal is booked electronically by both parties. This method combines
the relationship advantages of the telephone with the straight through processing
efficiencies of electronic execution.

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BEST PRACTICES USING FXALL |

Traders can mix and match these methods as desired, selecting the best approach for
each individual deal.
And via the same QuickConnect integration, completed trade details can be
automatically returned back to the client and banks systems to allow for real-time
booking, credit monitoring and trader limit supervision.

A.3 Middle & Back-Office


Trade details are then sent to Settlement Center to await confirmation from the bank.
Usually, this is performed using a QuickConnect integration from the clients Treasury
or Order Management System. Alternatively, trades executed on FXall can be fed
directly into Settlement Center with no integration required.
The winning bank confirms the deal information by sending an MT300 message to FXall
over the SWIFT network. FXall interprets the banks particular SWIFT format by filtering
the data and matches the details against the customers deal. Once the two sides of the
deal have been matched, the deal is confirmed.
Following confirmation, the next step is to identify settlement instructions for the deal
the physical bank accounts in which the FX will be settled. Settlement Center includes an
SSI Database to streamline this process. And banks maintain their own settlement
instructions in the database, freeing customers of this responsibility.
Using the information in the database, Settlement Center can also send an industry
standard MT304 message over SWIFT network on behalf of an asset manager. This
contains full details of the economic and settlement details of the trade.

A.4 Reducing Settlement Risk


Settlement Center allows the customer to choose between gross settlement, bilateral
netting and CLS by supporting the transition from legacy settlement methods.

Diagram 14: FXall Reducing Settlement Risk

For CLS participants, FXall provides


seamless messaging by sending third-party
notifications for all customers, not just
asset managers. FXall supports the CLS
Custody Mapping (the C- trigger) and
adds settlement instructions to the
confirmation and notification messages.
Matching is available on the settlement
instructions as well as the economic
details.

Finally, for clients that perform net settlement, the netting module in Settlement Center
allows counterparties to combine multiple payments arising from different deals into a
single, equivalent payment. The benefits of netting include the simplification of the
settlement process and the reduction of settlement costs and risk exposure.

Copyright 2004 FX Alliance, LLC. All rights reserved.

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BEST PRACTICES USING FXALL |

Appendix 2: Complete Listing of Best Practices from the


Foreign Exchange Committee
This document has only detailed some of the 60 Best Practices for managing Operational
Risk in Foreign Exchange. As a reference, please find below the complete listing.
In summary, a firm implementing FXall into its workflow will benefit significantly with
regard to the best practices highlighted in bold below:
Pre-Trade Preparation and Documentation
Best Practice no. 1: Know Your Customer
Best Practice no. 2: Determine Documentation Requirements
Best Practice no. 3: Use Master Netting Agreements
Best Practice no. 4: Agree upon Trading and Operational Practices
Best Practice no. 5: Agree upon and Document Special Arrangements
Trade Capture
Best Practice no.
Best Practice no.
Best Practice no.
Best Practice no.
Best Practice no.
Best Practice no.
Best Practice no.

6: Enter Trades in a Timely Manner


7: Use Straight Through Processing
8: Use Real-Time Credit Monitoring
9: Use Standing Settlement Instructions
10: Operations Should Be Responsible for Settlement Instructions
11: Review Amendments
12: Closely Monitor Off-Market Transactions

Confirmation
Best Practice no. 13: Confirm and Affirm Trades in a Timely Manner
Best Practice no. 14: Be Diligent When Confirming by non-secure Means
Best Practice no. 15: Be Diligent When Confirming Structured or Non-standard Trades
Best Practice no. 16: Be Diligent When Confirming by Telephone
Best Practice no. 17: Institute Controls for Trades Transacted through Electronic
Trading Platforms
Best Practice no. 18: Verify Expected Settlement Instructions
Best Practice no. 19: Confirm All Netted Transactions
Best Practice no. 20: Confirm All Internal Transactions
Best Practice no. 21: Confirm All Block Trades and Split Allocations
Best Practice no. 22: Review Third-Party Advice
Best Practice no. 23: Automate the Confirmation Matching Process
Best Practice no. 24: Establish Exception Processing and Escalation
Procedures
Netting
Best Practice no.
Best Practice no.
Best Practice no.
Best Practice no.
Documentation

25:
26:
27:
28:

Use On-Line Settlement Netting Systems


Confirm Bilateral Net Amounts
Employ Timely Cut-offs for Netting
Establish Consistency between Operational Practices and

Settlement
Best Practice no. 29: Use Real-Time nostro Balance Projections
Best Practice no. 30: Use Electronic Messages for Expected Receipts
Best Practice no. 31: Use Automated Cancellation and Amendment Facilities
Best Practice no. 32: Implement Timely Payment Cut-offs
Best Practice no. 33: Report Payment Failures to Credit Officers
Best Practice no. 34: Understand the Settlement Process and Settlement Exposure
Best Practice no. 35: Prepare for Crisis Situations Outside Your Organization

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BEST PRACTICES USING FXALL |

Nostro Reconciliation
Best Practice no. 36: Perform Timely nostro Account Reconciliation
Best Practice no. 37: Automate nostro Reconciliations
Best Practice no. 38: Identify non-receipt of Payments
Best Practice no. 39: Establish Operational Standards for nostro Account Users
Accounting/Financial Control
Best Practice no. 40: Conduct Daily General Ledger Reconciliation
Best Practice no. 41: Conduct Daily Position and P&L Reconciliation
Best Practice no. 42: Conduct Daily Position Valuation
Best Practice no. 43: Review Trade Prices for Off-Market Rates
Best Practice no. 44: Use Straight Through Processing of Rates and Prices
Unique Features of Foreign Exchange Options and non-Deliverable Forwards
Best Practice no. 45: Establish Clear Policies and Procedures for the Exercise of Options
Best Practice no. 46: Obtain Appropriate Fixings for non-standard Transactions
Best Practice no. 47: Closely Monitor Option Settlements
General Best Practices
Best Practice no. 48: Ensure Segregation of Duties
Best Practice no. 49: Ensure That Staff Understand Business and Operational Roles
Best Practice no. 50: Understand Operational Risks
Best Practice no. 51: Identify Procedures for Introducing New Products, New Customer Types
or New Trading Strategies
Best Practice no. 52: Ensure Proper Model Signoff and Implementation
Best Practice no. 53: Control System Access
Best Practice no. 54: Establish Strong Independent Audit/Risk Control Groups
Best Practice no. 55: Use Internal and External Operational Performance Measures
Best Practice no. 56: Ensure That Service Outsourcing Conforms to Industry
Standards and Best Practices
Best Practice no. 57: Implement Globally Consistent Processing Standards
Best Practice no. 58: Maintain Records of Deal Execution and Confirmations
Best Practice no. 59: Maintain Procedures for Retaining Transaction Records
Best Practice no. 60: Develop and Test Contingency Plans

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BEST PRACTICES USING FXALL |

Appendix 3: List of Related Documents & Websites


References
Foreign Exchange Committee
Management of Operational Risk in Foreign Exchange March 2003
http://www.newyorkfed.org/fxc/2003/fxc033103.pdf
ACI The Financial Markets Association
The Model Code October 2002
http://www.aciforex.com/mktpractice/model_code.htm
Bank of England
The Non-Investment Products code May 2003
http://www.bankofengland.co.uk/markets/nipscode.pdf
Recent amendment to the NIPs code:
http://www.bankofengland.co.uk/pressreleases/2003/058.htm
http://www.bankofengland.co.uk/markets/forex/fxjsc/

Copyright 2004 FX Alliance, LLC. All rights reserved.

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