Urgent reject code reform needed by Q3 this year

Banks and liquidity providers need to map out standardised reject codes to asset managers by Q3 2021, with full implementation in H1 2022, investment managers have called for today. Standardised reject codes help ensure that the rationale for a trade being rejected is well understood, in order to protect investors and ensure they aren’t exposed to undue market risk. 

A trade can get rejected for a variety of reasons, and if not executed, investment managers must be able to clearly understand why a trade has not proceeded, which is why the shorthand identifier, or reject code, is of vital importance. The FX market still has no standardisation of reject codes, which means each liquidity provider is able to provide their own set of idiosyncratic reject codes in heavily varying numbers and levels of granularity.

Earlier this year, the IA asked for progress on standardisation to be well in train by the end of 2020. Although the impact of the COVID-19 pandemic has inevitably slowed progress, the IA has also seen a reluctance on the part of many banks to fully get the process going, and ultimately little advancement has been made. 

Galina Dimitrova, Director of Investment and Capital Markets at The Investment Association, said: “It is imperative that asset managers are able to analyse trade rejections efficiently in order to best serve their clients. The current lack of consistency in the categorisation of these codes remain a significant barrier. We welcome the updated FX Global Code principles which echoes our call for greater transparency around the use of reject codes and collaboration between liquidity providers and investment managers to create a system that will better serve end investors.”

Hugo Gordon, Policy Specialist, Capital Markets at The Investment Association, added: “It is evident that in order to protect investors, a new approach is needed urgently. We will continue to liaise with banks and liquidity providers on the importance of this matter and work with them to ensure that the standardisation of reject codes is clearly mapped out.”


For further information, please contact:

Katie Martin, Head of Communications: [email protected]

T: +44 (0)20 7269 4655

Clive Booth, Communications Manager: clive.booth[email protected] 

T: +44 (0)20 7269 4620

Camilla Esmund, Communications Executive: [email protected] 

T: +44 (0)20 7269 4625

IA press office: [email protected]

T: 020 7269 4696

About the Investment Association (IA):

  • The IA champions UK investment management, supporting British savers, investors and businesses. Our 250 members manage £8.5 trillion of assets and the investment management industry supports 113,000 jobs across the UK.
  • Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
  • Our purpose is to ensure investment managers are in the best possible position to:
    • Build people’s resilience to financial adversity
    • Help people achieve their financial aspirations
    • Enable people to maintain a decent standard of living as they grow older
    • Contribute to economic growth through the efficient allocation of capital.
  • The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
  • The UK is the second largest investment management centre in the world, after the US and manages over a third (37%) of all assets managed in Europe.