LETTER ON CONFIDENTIALITY

This is an updated copy of a letter sent to market participants in 1997. It has been posted here under the auspices of the Canadian Foreign Exchange Committee, the Canadian Committee for Professionalism, and the Financial Markets Association of Canada:

Market participants occasionally bring to our attention concerns regarding breaches of confidentiality in the foreign exchange market. Confidentiality and customer anonymity are essential for the operation of a reputable and efficient marketplace. All participants, including both dealers and brokers, share equally in the responsibility for maintaining confidentiality.
Trading and sales personnel and brokers are obligated to hold all information about customers in the strictest confidence. All transactions, concluded or not, must remain confidential, with name disclosure only between the counterparties involved in each transaction. As well, it is inappropriate for trading personnel to ask for, or demand, information from brokers that would compromise, or appear to compromise, confidentiality.
In the special case of Bank of Canada (“Bank”) intervention in the foreign exchange market, once the Bank has actually dealt through a broker, that broker may confirm to others that the Bank has dealt, provided the exact amount and price level are not revealed. The disclosure of any other information, in any other circumstance, is a breach of confidentiality.
We encourage all senior managers and staff in the Canadian foreign exchange market to review not only the section on confidentiality, but the entire “Guidelines to Best Market Practices for Financial Market Personnel in the Canadian Foreign Exchange Market,” as well as the ACI – Financial Markets Association’s Code of Conduct. The Canadian Guidelines have been updated and revised, and were reissued in April 1997 under the auspices of the Canadian Foreign Exchange Committee, the Canadian Committee for Professionalism and the Financial Markets Association of Canada.
The purpose of the Guidelines is to encourage behaviour that enhances efficiency and professionalism in the Canadian foreign exchange market. In that regard, it is incumbent upon all personnel to advise appropriate senior managers of any breaches of confidentiality, or other aspects of the Guidelines.

Tim Noël, Chair
Canadian Foreign Exchange Committee

Rob Wittmann, Chair
Canadian Committee for Professionalism

Karl Berger, President
Financial Markets Association of Canada