Australian Foreign Exchange Committee Meeting Minutes

Sydney – 16 December 2016

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Attendees

Guy Debelle, RBA (Chair); Matt Boge, RBA (Secretary); Chris Howlett, ACI Australia; Simon Warner, AMP Capital (via conference call); Luke Marriott, ANZ (via conference call); Mark Ferguson, Australian Super; Winnie Tan, Bank of China; David Hatzidis, CBA; Itay Tuchman, Citigroup; Stewart Cox, BHP Billiton (via conference call); Jeff Ward, EBS (via conference call); Stephen Gilmore, Future Fund (via conference call); David Nolan, Goldman Sachs; Andrew Mourd, JP Morgan; Mark Lawler, National Australia Bank; Peter Fogarty, Macquarie Bank; Stuart Simmons, QIC (via conference call); Gary Latner, Thomson Reuters; Chris Knight, XTX Markets; Hugh Killen, Westpac

Apologies

Murray Regan, AFMA; Rachael Hoey, CLS; Lee Merchant, Deutsche Bank; Mike Coghlan, Reserve Bank of New Zealand

Secretariat

Jason Griffin, RBA

1. Minutes of previous meeting

The minutes of the previous meeting were accepted without modification.

2. Matters arising from the Minutes

Having consulted with market participants, ACI Australia noted the Australian FX market would be officially open on Monday 26 December, but be closed on Monday 2 January 2017. However, it is up to each bank to decide on the hours they staff their offices.

3. Feedback on the draft FX Global Code

The Chair discussed the timetable for publishing the Code in May 2017. The latest draft of the Code was distributed to committee members in mid December. Feedback on that draft would be discussed at the BIS working group meeting in the first week of January. A ‘fatal flaw’ draft would then be distributed in February. The Code will be finalised and endorsed by global central banks and foreign exchange committees in March ahead of its launch at the Global Foreign Exchange Committee meeting in London at the end of May.

Discussion by the AFXC on the draft Code covered several areas, with some members seeing pre-hedging and ‘last look’ as requiring further clarification. The committee also discussed the draft ‘statement of commitment’ that had been distributed with the Code. To reinforce adherence to the Code, members of the AFXC (and members of foreign exchange committees globally) will be expected to sign the statement.

4. Update on GBP trading on 7 October

The Chair informed members that the BIS Markets Committee had finalised their report on the volatility in GBP on 7 October. The report will be presented to central bank governors at their meeting in early January, and may be subsequently published.

5. General Business

None.

6. Next Meeting

The next meeting is scheduled for late March 2017 to coincide with the distribution of the ‘fatal flaw’ draft of the FX Global Code. The exact timing will be advised closer to the date.