Handbuch Treasury / Treasurer's Handbook

S. 828PART V The Model Code - International Code of Conduct for Financial Markets

S. 830A common aim of all codes of conduct is to promote efficient market practices by encouraging high standards of conduct and professionalism. Yet, the largely unregulated global foreign exchange market thrived and expanded for decades in the major international centres without any written code or guidelines on market practice or conduct.

The situation lasted until the early 1970’s when the “O’Brien Letter” was issued to authorised banks in London by the Bank of England. This short, but timely and useful, first circular dealt with a number of dealing issues and provided much needed clarification and recommendations on some market practices and conventions, which were expanded upon in later editions. From 1980, the emergence of new markets and instruments such as financial futures, interest rate swaps, options and other derivatives employed by treasury and capital markets dealers further underlined the urgency of the situation.

Therefore, in May 2000 the Model Code was launched at ACI’s International Congress in Paris. The Model Code has been compiled in ...