Minutes of the London FXJSC Operations Sub-committee Meeting – 26 February 2025

Minutes

Item 1 – Welcome and Apologies

James Kaye (Chair, HSBC) welcomed observers Loic Moreau (LSEG) and Jason Furmedge (BNY). The Chair also welcomed guest presenters Muna Lisimba and Tanveer Bhatti (Bank of England). The Chair thanked outgoing member Alex Chow (Investment Association) for his contributions to the committee.

The Chair noted apologies from John Hagon (CLS), Daniel Hoye (NatWest Markets), Claire Foster Lee (Morgan Stanley) and James Hull (MillTech FX).

Item 2 – Minutes of the November Meeting and Feedback from the November Main FXJSC Committee Meeting

The minutes from the 20 November 2024 meeting were agreed. The Chair provided an overview of the November Main Committee meeting^{footnote [1]}, noting that members had discussed FX settlement resilience, including the importance of clear and timely communication during a major industry disruption. The Main Committee also discussed key themes in the FX market for 2025, including the growth of digital assets, the transition to T+1 securities settlement in the UK and Europe, and its impact on FX markets.

Item 3 – FXJSC Turnover Survey Presentation

Muna Lisimba (Bank of England) gave an overview of the October 2024 FXJSC Turnover Survey^{footnote [2]} results. Mr Lisimba noted there had been a 5% decrease in daily average FX turnover compared to the April 2024 survey, but turnover had increased compared to October 2023. Members discussed the potential structural reasons behind April historically experiencing higher turnover, and the impact upcoming market structure changes and technological developments could have on turnover.

Item 4 – The use of Legal Entity identifiers (LEIs) in ISO 20022

Tanveer Bhatti (Bank of England) facilitated a discussion on the use of LEIs in the ISO20022 framework. Mr Bhatti noted that as of 1 May 2025 the use of LEIs for CHAPS payments between Financial Institutions will be made mandatory. Mr Bhatti explained how LEIs could be sourced and the types of institutions in scope of the changes. Mr Bhatti noted that the Bank was encouraging Direct CHAPS Participants to enrich their internal databases with LEIs, to meet the Bank’s CHAPS requirements and for greater financial transparency.

Item 5 – Review of FXJSC Operations Committee Communications around Resilience Issues

Members discussed the Committee’s communication processes during market wide resilience issues, including the decision-making process and subsequent communications around extraordinary meetings. Members agreed to review its processes around calling extraordinary meetings and providing communications to the wider market. The group agreed to continue looking at this going forward.

Item 6 – FX Settlement Risk Reduction Initiatives

Natalie Lovell (Bank of England) provided a high-level overview of the October 2024 Global Foreign Exchange Committee (GFXC) FX Settlement Risk Survey results. Ms Lovell added that the April 2025 GFXC FX Settlement Risk Survey would run alongside the BIS Triennial Survey, and both surveys would use consistent reporting methodology.

Ms Lovell explained that during 2025 the GFXC FX Settlement Risk Working Group would focus on analysing the results of the GFXC and BIS Triennial FX settlement risk surveys. The Working Group would also consider producing a discussion paper on the potential impact of the UK/EU move to T+1 securities settlement on the FX market.

Item 7 – Update on FX Settlement Crisis Playbook

Eleanor Garrett (Bank of England) gave an update on the work to publish the FXJSC Operations Committee’s FX Settlement Crisis Playbook. Ms Garrett noted that the Secretariat would reach out to relevant parties to share a proposed approach to publication and agree next steps. Ms Garrett asked members to continue to socialise the playbook within their respective organisations.

Item 8 – FX Global Code Discussion

Natalie Lovell (Bank of England) gave an overview of the updates made by the Global FX Committee (GFXC) to the FX Global Code (the Code) following its 3 year review. The 2024 updates strengthen the Code’s guidance on mitigating FX settlement risk, and promote increased transparency around certain types of FX transactions and use of client-generated data. It was noted that the GFXC were encouraging Market Participants to re-attest to the Code within 12 months.

Item 9 – CLS Update

Andrew Cooper (CLS) gave an overview of CLSNet, noting its ability to deliver risk mitigation for over 120 currencies. Mr Cooper highlighted that CLS were continuing to work with relevant parties to address ongoing liquidity issues observed in specific currencies. It was noted that CLS planned to run a market wide resilience test towards the end of 2025.

Item 10 – Swift Update

Joe Halberstadt (Swift) explained that there had been some changes made to the Swift coexistence strategy ahead of the transition to the ISO20022 message standard. Mr Halberstadt noted that following the end of the coexistence period, there would be some short-term contingency measures in place, whereby any messages sent in legacy format would be automatically converted to ISO20022 format.

Item 11 – Investment Association Update

Alex Chow (Investment Association) gave an update on the International Securities Association for Institutional Trade Communication (ISITC) claims and compensation best practices. It was noted that IA membership views on a potential increase in the compensation threshold from $500 to $1000 remained mixed. Mr. Chow highlighted that a decision on the compensation threshold would be made in March 2025.

Item 12 – Global Foreign Exchange Division (GFXD) Update

Steve Forrest (UBS) provided an update from the November GFXD meeting. Use cases of Artificial Intelligence had been discussed and a survey amongst GFXD members to understand the reasons why trades settle outside of Payment Versus Payment Settlement systems had been conducted.

Item 13 – FCA Update

Oliver McCausland (FCA) noted that the UK’s Accelerated Settlement Task Force’s Final Report had been published and that the FCA had welcomed the recommendations in addition to encouraging firms to engage with them and begin preparations for the transition to T+1 settlement. Mr McCausland also noted that the International Organization of Securities Commissions consultation on pre-hedging practices had closed, and a final report would be published in due course.

Item 14 – Any other business

Members discussed potential discussion topics for future meetings, including Central Bank Digital Currencies and control frameworks around the use of Artificial Intelligence.

Attendees

Aaron Mills – Citadel
Alex Chow - Investment Association
Andrew Grice – Bank of England
Anna Chadderton - Goldman Sachs
Fiona Maria O’Riordan – Citi
Gail Smith (Deputy Chair) – RBC
James Andrews – JP Morgan
James Kaye (chair) – HSBC
Joe Halberstadt – SWIFT
Nimit Jobanputra - Deutsche Bank
Nikki Woodley – Northern Trust
Oliver McCausland – FCA
Steve Forrest – UBS
Kerry Peacock (deputy chair) – MUFG

Alternates

Andrew Cooper – CLS
Aparna Shrivastava – Morgan Stanley
Vinoth Kuppusamy – Natwest Markets

FXJSC Secretariat

Eleanor Garrett – Bank of England
Joe Hanrahan – Bank of England
Matthew Hartley (Legal Representative) – Bank of England

Guest attendees

Jason Furmedge – Bank of New York
Loic Moreau – LSEG
Tanveer Bhatti – Bank of England
Muna Lisimba – Bank of England

Apologies

Jon Hagon – CLS
James Hull – MillTech FX
Daniel Hoye – Natwest Markets
Claire Foster Lee – Morgan Stanley