The foreign exchange (Forex, or FX) space is about to get a bit more organized. Last month, industry professionals from banks, exchanges, and technology firms, among others, announced they were joining forces to launch the Foreign Exchange Professionals Association (FXPA).

“The group is designed to engage key regulators and policy makers through education, research, and advocacy, with the goal of advancing a sound, liquid, transparent, and competitive global currency market,” the organization states on its website.

FXPA’s leadership structure includes representatives from throughout the space, with Citadel Senior Managing Director and Chief Legal Officer Adam Cooper tapped to be the group’s first chairman. Officials of CME Group, BNY Mellon Global Markets, CalPERS, Virtu Financial, LMAX Exchange, GFI Group, and LCH.Clearnet fill out the board.

“As technological innovation, new competitive forces, and an evolving regulatory framework redefine the FX landscape, we must promote market structure that fosters robust, efficient, and transparent markets for all participants,” Cooper said in a news release. “FX is a cornerstone to our capital markets, and the FXPA is the ideal vehicle to strengthen collaboration across the industry and engagement with policymakers to achieve these shared objectives.”

Regulation on the Rise

The launch of FXPA comes at a time when regulatory concerns are on the rise in the foreign exchange space.

In response to scandals involving breaches of confidentiality—traders using chat programs such as Snapchat to share sensitive data about clients’ buy and sell orders, for instance, and probes into whether industry officials were sharing confidential information about clients with other firms—many of the largest players launched measures designed to limit traders’ ability to profit from confidential data. Bloomberg reports that Barclays, UBS AG, Royal Bank of Scotland Group Plc, Goldman Sachs, and Deutsche Bank AG are among the firms agreeing to new practices, such as limiting what dealers can charge for currency exchanges and prohibiting them from using online chat rooms.

Many of the issues around trading involve the slow rate at which foreign exchange occurs on computerized platforms. Compared with equities, which have been traded on electronic platforms for years, more than a quarter of foreign-currency trades still don’t happen electronically.

The current state of affairs, including a fear that U.S. regulators will clamp down on a largely unrelated field, is leading banks to encourage clients to use their electronic-trading platforms.

FXPA’s founding is another reflection of this changing environment. In the group’s news release, LCH.Clearnet’s Gavin Wells noted that the association comes “at a time when the market is facing widespread structural change and reform. By working together as an industry, we hope to address issues and develop solutions that will benefit the FX market for the long term.”

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