Global forex code bans 'last look' trading tactic

LONDON – 15 November 2017: A controversial trading tactic used on the $5 trillion (£3.78 trillion) a day foreign exchange markets has been banned by a global committee of central bankers and industry officials.

The Global Foreign Exchange Committee said on Wednesday it had concluded that traders should not undertake trading activity that uses information from a customer’s trading request during the “last look” window.

“Last look” refers to the ability of dealers to reject a trade at the last minute. Critics say traders could potentially abuse this by using the market intelligence gained to influence other trades.

The committee said the decision would be reflected in a revised version of its code that was launched in May in response to banks being fined billions of dollars for rigging currency benchmarks.

The committee said it had also agreed to clarify conditions under which certain trading arrangements could be distinguished from “last look”.

“The GFXC has made a number of decisions that will help to strengthen and embed the Code across the global market,” the committee’s chair, Chris Salmon, said in a statement.

Salmon, who is executive director for markets at the Bank of England, said in September the code may need tweaking.