Minutes of the London FXJSC Legal Sub-committee Meeting – 5 March 2025

Minutes

Minute 1: Welcome and apologies

James Brennan, acting as Chair in Sharon Blackman’s absence, opened the meeting, welcoming those online and in person.

Minute 2: Minutes

The minutes of the meeting of 26 November 2024 were approved.

Minute 3: Look back / look forward: update on the regulatory framework impacting the FX market - Peter Bevan & Simon Treacy (Linklaters)

The speakers gave an outlook for this year of key topics in terms of legal and regulatory risk. It was described as a moving target.

1. Regulators continue with reviews of, and suggested improvements to, regulation
2. Less “Big Bang” but no shortage of regulatory change for regulators to implement
3. Increasing divergence across jurisdictions
4. While a lot of focus on retail, continued spillover into wholesale markets

MiFID II / MiFIR topics and cross-cutting issues:

• Post-trade reporting waterfalls
• Transaction reporting
• Market data / “reasonable commercial basis” requirements
• Order execution policies
• UK MiFID landscape

Wholesale markets reform: Pre-hedging

The Committee members discussed concerns over what constitutes market abuse, specifically in relation to pre-hedging. There is an IOSCO (International Organization of Securities Commissions) report due later in 2025, which may shed further light on this issue.

Wholesale markets reform: EU EMIR 3 active account requirement (AAR)

CRD6: Impact on cross border business

CRD6 is in force, including Article 21c, which imposes tighter restrictions on banks providing cross border services into the EU. The deadline for transposition of CRD6 into member state national law will apply from 10 Jan 2026 but there is an additional year for transitional relief.

Cryptoasset regulation: FCA roadmap

The EU has created its regulatory regime, but because in the UK cryptoassets are covered by other regimes such as the anti-money laundering and financial promotions regimes, the FCA is looking to develop a licensing regime.

Financial Crime

The Government is expected to publish a new fraud strategy this spring. It is a highly active area of enforcement for the FCA and a strategic priority. The stated purpose of the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) is to tackle the use of UK business and finance for criminal activities. As such, it introduces legislative changes aimed at facilitating the prosecution of corporations for fraud and economic crime failings.

UK principles-led approach to AI regulation

In the UK, there aren’t any plans for broad brush regulatory framework (unlike the EU), instead the UK has adopted a principles-led approach to the regulation of AI. There are five principles for sectors to consider when they are making guidance.

1. Safety, security & robustness
2. Fairness
3. Transparency & explainability
4. Accountability & governance
5. Contestability & redress

Regulatory expectations

• Expectations of the regulated sector remain high
• Less enforcement action expected, particularly enforcement for the sake of enforcement
• Likely no let-up in s166 investigations and an increase in the use of intervention powers by supervisors
• Continued focus on AML and systems and controls
• SMF enforcements will also remain in spotlight

Minute 4: Look back / look forward: discussion of the FX market in 2025 - FXJSC Legal Sub-Committee members

There was a discussion about ISDA’s FX definitions. The members proposed for ISDA to present to the Committee at a future meeting.

The implementation of some of the latest changes to the Global Code was discussed, particularly changes to information required to be submitted by clients. It was suggested that the secretariat could arrange for someone from the relevant working group to attend the next meeting to discuss, recognising that legal representation may be required to answer some of those questions.

Minute 5: Any other business

Future meeting topics were discussed:

• EU Benchmarks regulation and the exemption for Spot FX and certain NDFs, perhaps someone to discuss which rates will qualify.
• Implementation of the Global Code requirements

Attendees

Simon Goldsworthy – Deutsche Bank
David Harris – Financial Conduct Authority
Joanne Napleton - London Stock Exchange Group
Tamsin Rolls – JP Morgan Chase
Baljit Saini – NatWest
Rakesh Shah – Standard Chartered
Rowland Stacey – Goldman Sachs
Krisha Somaiya – UBS
Gaynor Wood – CLS

FXJSC Legal Sub-Committee Secretariat

James Brennan – Bank of England
Matthew Hartley – Bank of England
Carly Jones – Bank of England

Guest attendees

Peter Bevan – Linklaters
Simon Treacy - Linklaters

Apologies

Sharon Blackman (Chair) – Citigroup
Stephanie Cayer – NatWest
Nimisha Kanabar - Morgan Stanley
Sunil Samani - XTX Markets
Mayank Patel – Bank of America
Harkamal Singh Atwal – HSBC