Currency traders race to reform 'last look'

CURRENCY traders may not be fast enough, at least when it comes to cleaning up their image. At issue is a controversial custom called "last look", which allows market makers to back out of a trade. After allegations of abuse, most major banks have recently taken steps to publicly disclose their trading standards to clients. But not all are on board. Top-10 dealer BNP Paribas SA doesn't. And a big player in high-frequency trading called Tower Research Capital LLC says it doesn't need to.

Industry executives - still reeling from paying billions in currency-rigging fines - concede that the largely unregulated US$5.1 trillion-a-day foreign-exchange market could use a dose of transparency. As part of an effort to police themselves, traders are hoping a global code of conduct due in May will help shore up their reputation before regulators crack down harder.

"There's a large chunk of the industry that's disheartened by the scandals and by what's happened to the industry, and wants to move to a better place," said Guy Debelle, deputy governor of the Reserve Bank of Australia who is helping develop the code of conduct. "People do care about the industry and want it to function effectively and restore some of its lost reputation."