Jordan A. Thomas discusses steps the industry and regulators have taken in developing the code of conduct for the foreign exchange sector

Global regulators recently unveiled their first pass at a uniform code of conduct for the foreign exchange market following a wave of multibillion-dollar rate-rigging settlements, but critics said the proposal was too long in coming and not complete enough to make any meaningful change.

The proposed code of conduct released by the Bank for International Settlements, a Basel, Switzerland-based panel of central banks from around the world, and its Foreign Exchange Working Group, includes broad platitudes that would be put in place voluntarily by banks and other market participants. Among the elements of the code of conduct are admonitions to "behave in an ethical and professional manner," to avoid conflicts of interest and to execute trades fairly and transparently while protecting customer information.

The slow pace that the industry and regulators have taken in developing the code of conduct for the foreign exchange sector is surprising given that banks and other firms already operate under such voluntary, non-legally binding codes.

Jordan A. Thomas, Chair of Labaton Sucharow’s Whistleblower Practice said, "I am surprised that the leaders did not make this a priority sooner and that it's taken so long. They're not the first organization to put together a code of conduct."

Still, Thomas said that the industry's willingness to participate in the process of writing the code indicated at least some willingness to address past problems. "Even though delayed, they're taking the first steps toward establishing a culture of integrity," he said.