The Last Look…
Posted by Colin Lambert. Last updated: December 21, 2021
This is not the first changing of the guard we have seen at the Global Foreign Exchange Committee (GFXC), but it will be interesting to see how the committee evolves over the coming two years.
It is hard to tell exactly how much influence the chair has on deliberations, but there is no doubt that Andréa Maechler is following something of an activist chair in Guy Debelle. I understand I have strong views on the issue (and a few others…) but I feel the FX industry should be grateful to Debelle for his leadership around last look. There may be those that are happy to sweep the issue under the carpet and believe that all was well in the FX world, but the reality was there was growing disquiet around last look’s use.
Not only were further changes made to the Code – and if you want an indication of how important getting last look right is, I would observe that it has been subject to more amendments than any other part of the Code since inception – but Debelle reinforced the message by unequivocally stating that additional hold times are not best practice.
One of the challenges for Maechler may be maintaining this momentum, for there are without doubt those who wish to dilute the message – even after the UK’s FCA has reiterated it. I, for one, will be watching the disclosure cover sheets closely as they are made public, for the GFXC has, with its recent publications and statements, given the FX industry a chance to reset the bar on last look. It is an opportunity that should be taken and if that means that certain toxic clients no longer get such a great service and some LPs volume numbers dip, so be it.
One reason why I think it will be interesting to observe the GFXC’s deliberations under the new leadership, is because, according to the published minutes, neither Maechler, nor Stefanie Holtze-Jen, CIO Asia-Pacific for Deutsche Bank – Private Bank, who has been named co-vice chair, seems to have previously attended a meeting.
This is not necessarily a bad thing, fresh eyes on issues can often be helpful, but it will be interesting to see their level of engagement. Personally speaking, I think engagement levels from various chairs and vice-chairs have varied over the years, it is to be hoped that both join the existing co-vice chair Richard de Roos and commit to the project of ensuring the FX market remains free from onerous regulation.
The good news is the new leadership has time to bed in before thinking turns to the next three-year review – and with that positive note on which to end, I will close the opinion keyboard for the year and wish all readers a happy and healthy 2022.