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Foreign Exchange Encyclopedia Foreign Exchange Global Code of Conduct (XIV)

Operational Risk Principles32 Market cashback forex avatradetradingrebateexindustryinsider.com">avatradebroker deploy appropriate processes to identify avatrade forex broker manage operational risks that may arise from human error, inadequate or failed systems or processes, or external events Market participants should consider operational risks arising from global cross-border environments, such as time differences or differences between industry regulations Operational risks may include those arising from human error, misconduct, system problems, unforeseen external circumstances Market participants should adopt strict security measures to address the vulnerability of trading areas and infrastructure to possible operational disruptions, terrorism, or disruptive activities and, where appropriate, should control access to trading functions by non-traders and external visitors, deploying processes for time limits, security reviews, and management approvals.33 Participants should deploy business contingency plans appropriate to the nature, size, and complexity of their foreign exchange operations, and in the event of a large-scale disaster, inability to access critical trading platforms, clearing or other key services, or other market disruptions, the relevant programs should be able to be deployed quickly and effectively Business contingency plans may include, but are not limited to, the following elements: emergency plans to support the continuity of foreign exchange operations including data storage and usage plans and Regular review, updating and testing of processes for responding to FX fixing price unavailability contingency plans including conducting rehearsals to familiarize executives and relevant employees with contingency plan arrangements This should include regular review of potential scenarios that could activate such plans Disaster recovery plans that identify necessary system and program backups All key automated processes identified by market participants should have a documented automated or manual contingency external Identification of dependencies includes knowledge of the business continuity plans of settlement system operators and other infrastructure and critical service providers, as well as the integration of such plans or other backup processes with the market participants own business continuity plan Emergency contact information for internal and external dependencies should ensure that communication tools are secure Non-host location backup sites that can accommodate key staff, systems, operations, regular Maintenance and testing of technology risk principles34 Market participants should deploy processes to address potential adverse consequences resulting from the use of or reliance on technology systems (hardware and software) Market participants should deploy processes to clearly designate ownership of each system relied upon, and any changes should be approved in accordance with internal policies Any systems should be thoroughly tested before being put into service, and an audit trail of all actions should be maintained for This should apply to the development, testing, deployment and subsequent updating of trading systems and algorithms Market participants should also be aware of broader risks that may exist and affect their foreign exchange market activities, such as cybersecurity-related risks Market participants operating electronic trading platforms should monitor the intraday conditions of the platform (e.g., equipment utilization) and should also conduct periodic capacity tests of key systems to determine that the system is capable of handling transactions in an accurate, timely and robust manner Market participants involved in electronic trading should implement appropriate controls to reduce the likelihood of and mitigate adverse consequences of generating and acting on electronic quotes that could lead to erroneous trading or market disruptions, such as off-exchange quotes or trades, human error, unintended or uncontrolled trading activity due to technical failures, flaws in trading logic, unintended or Extreme market conditions market participants should not intentionally generate quotes in a manner that exceeds the technical capabilities of the recipient or is inconsistent with the advertised agreement, or take action against the relevant quotes should control excessive message rates that are deemed to approach or exceed platform limits, for example by adopting throttling logic or circuit breakers any identified platform defects or features that may threaten ongoing operations should be upgraded accordingly third party integration into the generation of Electronic processes of those participants generating and acting on quotes does not eliminate the obligation of any party Market participants such as consolidators and multi-bank venues that may perform distribution functions and act on electronic quotes should comply with all relevant principles