Best Market Practices

These guidelines on best practices are intended to serve as a reference for all market participants when they undertake, arrange or administer transactions in the foreign exchange market. In this document, foreign exchange personnel include management, sales, front-office dealing (trading), and back-office operations personnel.

The concept of “best practices” refers to the principles and practices of current market behaviour, including those provided in the Guidelines to Market Behaviour for the Canadian Foreign Exchange Market, issued by the Canadian Foreign Exchange Committee in June 1990, and the Code of Conduct issued by the Association Cambiste Internationale (ACI). These best practices, however, provide a comprehensive update on market practices designed to encourage behaviour that enhances efficiency and professionalism by those involved in Canadian financial markets and to promote public confidence in the integrity of Canadian financial markets. Guidelines on market practices related to risk management and disclosure are available from the Office of the Superintendent of Financial Institutions (OSFI) and the Canada Deposit Insurance Corporation (CDIC).

Although these guidelines are intended as “minimum” best practices for foreign exchange personnel, they do not create any legally enforceable obligations, duties, rights, or liabilities. Failure by market personnel to comply with any of these best practices will be dealt with by their respective institution. It is incumbent on all personnel to advise management of situations where there may be breaches of these best practices. Similarly, it is recommended that each financial institution establish specific procedures to handle complaints in order to ensure that clients’ problems are dealt with quickly and effectively.

All financial institutions participating in Canadian financial markets are encouraged to observe the practices outlined here and, as necessary, introduce or revise their own codes of conduct in an effort to maintain market standards. These best practices supplement, rather than replace, other existing codes of conduct and rules that may be in place at individual institutions, and are in addition to any and all applicable laws and regulations.