Traders work on the floor before the closing bell of the Dow Jones at the New York Stock Exchange on March 15, 2017 in New York. 
US stocks added to gains and the dollar retreated after the Federal Reserve raised benchmark interest rates. / AFP PHOTO / Bryan R. Smith        (Photo credit should read BRYAN R. SMITH/AFP/Getty Images)

Sir, Norges Bank Investment Management is right to challenge the foreign exchange industry to bring more transparency to the market (“ Biggest wealth fund calls for makeover of scandal-hit forex”, November 11). This follows Vanguard’s welcome call for the elimination of “last look” to restore transparency and trust in its response to the Global Foreign Exchange Committee’s recent consultation on this practice.

The current situation is that foreign exchange traders are often forced to navigate inconsistent standards, market practices and evaluate different styles of liquidity. They face either complete opacity or the confusion of conflicting messages and benchmarks. The FX industry is at long last heading to a broad consensus about the importance of transparency in a highly complex, fragmented and mostly over-the-counter marketplace. But we are some way off agreement on the means to achieve it.

Transparency cannot merely mean deluging customers with an unworkable volume and variety of disclosure information. It should be about clear, concise and common metrics that allow customers to take back control of their trading strategy. Cohesive, complete information will go a long way to sweeping away the distrust built up over the past few scandal ridden years.

At LMAX Exchange, we are calling for participants of all kinds within the industry to collaborate to create robust, commonly agreed execution quality metrics in FX. These will help participants to compare firm and “last look” liquidity, to make informed choices, and to stay in control of their FX trading strategies.

David Mercer
Chief Executive, LMAX Exchange, London W11, UK

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