Please learn that a financial market’s smooth, efficient, and fair functioning depends heavily on the professional standards and integrity of those who are engaged in it. As the market increases in scale, variety, and complexity, the demands for greater ethical compliance and consistent practices are correspondingly growing.

The SFEMC has developed this set of good practice guidelines, “The Singapore Guide to Wholesale Financial Markets Behavior and Business Practices”, often widely referred to as “The Blue Book.” In conjunction with the FX Global Code (the ‘Global Code’), the Global Code is useful as it is a code of conduct for the global wholesale foreign exchange market and the Global Code has been endorsed.

Please learn that the Guide, Blue Book refers to organizations as well as to persons who, on behalf of those organizations, perform activities. These people include manufacturers, brokers, salespeople, and structures. In this Guide, the term Market Participant is used to refer generally to both entities, as well as the individuals who conduct activity in the wholesale financial markets on behalf of entities.

It is stated that although the Code of Conduct for the Singapore Foreign Exchange Market is the Global Code of Conduct, the Guide also applies to foreign exchange. It lays down additional principles to appeal to the unique circumstances of the foreign exchange market in Singapore. There are two kinds of principles in the Global Code. The generic principle can apply equally to all other asset classes, being the first principle of the global code.

There are two types of principles in the Global Code: (1) general principles that can be applied similarly to all asset groups, and (2) principles that address specific concerns with the foreign exchange market (‘FXspecific Principles’). Best practices for the non-foreign exchange markets will also be generic standards. The SFEMC has therefore agreed to adopt, as part of this Guide, the Global Code Generic Principles, and to extend them to all asset classes.

It is to be learned that the essence of the Guide, Blue Book is not prescriptive. It is applied based on the principle of proportionality: how each Market Participant applies the principles in this Guide and how each Market Participant can take steps to match his or her activities with the principles in this Guide depends on the nature and scale and complexity of the activities of the Market Participant in the wholesale financial markets.

It is to be acknowledged that prior to hiring senior managers, FIs are responsible for performing the required due diligence. Furthermore, FIs establish the appropriate governance policies and processes to promote proper accountability and effectively facilitate the performance of their duties and responsibilities by senior managers.

Please note that the Blue Book offers guidance on good conduct and market practices. It does not enable market participants to have legal or regulatory obligations. Market participants can continue to comply with all relevant laws and regulations.

Please note that Market Participants that enter into transactions inside a trading facility should comply with the rules of the trading facility or platform that govern such transactions by the trading facility or the network. In addition, market participants who are banks in Singapore should comply with the guidelines and by-laws of the Singapore Association of Banks (‘ABS’) (if applicable).

Please note that the Bluebook is applicable to all wholesale dealings in the exchange-traded and over-the-counter markets for:
1. Foreign exchange;
2. Debt securities;
3. Money Market Instruments;
4. Products for derivatives; and
5. Other (new or evolving financial products) Market Instruments.

Please note that Market participants that are Singapore banks should abide by the guidelines and bye-laws of the Association of Banks in Singapore (‘ABS’) (where applicable). Market The recommendations issued by their industry association should be complied with by participants who are members of other industry associations. Any such legislation, policy, rule or guideline shall not prevail over or change this Guide.

While this Guide is recognized as having no specific contractual or legal effect, all SFEMC members hereby consider themselves to be bound by its provisions. In addition, this guide reflects industry guidelines on good practices, which are expressly acknowledged by all SFEMC members. All SFEMC members further agree that on the part any failure of any person acting on their behalf should call into question whether the conduct of that individual is fit and proper.

Please note that in order to ensure that they are in line with international best practices and to safeguard the soundness of the scheme, the SFEMC regularly reviews market practices. This version of the Guide is the result of a 2017 review by a working group to align this Guide with the Global Code, as well as a process of consultation with key industry stakeholders.

It is stated that for preserving a reputable and efficient marketplace, confidentiality and client anonymity are essential in the Singapore Guide to Conduct and Market Practices for the Wholesale Financial Markets. Market Participants should retain and help to maintain confidentiality in all matters, including customer information and dealing counterparties who are aware of their duties in the execution of their duties.

Please learn that Market Participants acting as principals and as intermediaries(such as brokers or trading platforms) share equal responsibility for preserving the integrity of the market through the proper maintenance of confidentiality. No customer information should be revealed except in compliance with the relevant laws and regulations, in particular section 47 and, where relevant, the third timetable of the Banking Confidentiality and Disclosure Act.

Please note that where a Market Participant routinely shares client information with other branches/subsidiaries within its group, this information should be shared only in accordance with applicable laws and regulations and established procedures. No customer information should be revealed except in accordance with applicable laws and regulations.

It is stated that it is the duty of market participants to ensure that their workers have been trained to recognize and handle confidential or sensitive information and to deal properly with circumstances requiring anonymity and discretion. Market participants must ensure that suitable policies and procedures are in place to ensure that confidential information is handled appropriately and not used for their personal gain by any employee.

It is to be acknowledged that Brokers do not unnecessarily disclose names. Only after the material terms of the transaction have been agreed, including the agreed level and length, should the Brokers reveal the names of their principals/counterparties. According to applicable industry practice, the transaction level is decided upon.

Pressure involves any comment to the effect, or which could be interpreted as meaning that a failure to comply would result in a reduction of the undertaking offered to the broker by the market participant or by other market participants. Market Participants should likewise refuse any request from their clients to reveal confidential information and such an incident should be reported by the staff of Market Participants to their management.

Please note that the Staff of Market Participants should not engage in activities which may realize an immediate gain (or avoid loss) but may compromise their employer’s or their own reputation. To avoid uncertainty, if a Market Participant’s employees work a pending order from a customer in relation to a specific product covered by this Guide and it could have a substantial effect on the price of that product.

It is stated that in order to reinforce the foundation for strengthening overall professional standards of the dealing community, it is important to maintain a consistently high level of awareness and understanding of good conduct and market practices among Market Participants. Courses and qualification programs are conducted by industry organizations to accomplish this, as the SFEMC can, from time to time, advise them.

Please note that Market participants should ensure about their staff that they the minimum qualifications required by applicable laws and regulations, such as where applicable, passing the Capital Markets and Financial Advisory Services Review. The concepts found in the Principles of the Global Code should also be applied to market participants. “Market participants should aim for the highest ethical standards” is set out in Principles.

Please note that each market participant is responsible for managing the risks resulting from its market activities. Market Participants are expected to have a sound and effective governance framework to provide clear responsibility for and comprehensive oversight of their activity in the financial market.

It is stated that many trade-related controversies involving other market actors are rooted in weak internal controls and duty segregation. In accordance with applicable laws and regulations, best practices, and other defined principles of governance, risk management, and enforcement, market participants are required to manage their risks prudently and responsibly.

It is to be acknowledged that Market Participants offering electronic trading systems (including e-trading equipment or platforms and electronic broking systems) (each ‘Provider’) should ensure that those systems are robust and have adequate controls and security features.

It is to be acknowledged that whether acting as a principal or a broker, all market participants should make it clear about the prices whether the prices they quote are firm or merely indicative. Prices quoted by brokers should, unless otherwise eligible, be taken to be firm in marketable amounts.

Please note that a market participant should deal with an acceptable name, regardless of the market level, with the terms who quote a firm price/rate and stating his requirements to a Broker. Brokers, for their part, are expected to check at regular intervals with their principal if the interests of the latter are still firm at particular prices/rates.

Please learn that the broker should automatically put the price “under the reference” if the market participant has an interest on one side of a two-way price and the other side is dealt away by other parties. The Broker should then consult with the Market Participant to assess the initial interest of the latter. When market participants place orders with special conditions attached, brokers must accurately report the conditions stated.

Please learn that where Market Participants are handling client orders, these orders should be handled promptly, professionally, with fairness and transparency, and with due consideration to the customer’s best interests. Market participants should be assured that the design, scope, and risks of the proposed transactions are acceptable for their customers.

In the marketing of financial products and consumer transactions, market participants involved in customer transactions should behave honestly and in good faith. Market participants do not enter into any transaction which may conflict with a duty of care owed to a client unless such interference is reported to the customer and the customer agrees to the transaction.