The global financial industry has made strides in enhancing the integrity of the foreign exchange (FX) market, but there is still room for improvement, particularly among the market’s smaller players, says the Financial Stability Board (FSB) in a new report.

The FSB published a progress report on Thursday on the implementation of its recommendations for reforms to FX benchmarks in an effort to reduce the incentive, and opportunity for, improper trading around the benchmark fixes. So far, those reforms, and other efforts at enhancing market integrity “appears to have moved the market in a favourable direction,” the FSB says in a statement.

The report finds that there has been “good progress in implementing many of the recommendations”; however, it also notes that this hasn’t been universally successful. In particular, the report stresses that the reform recommendations are intended to apply to all FX benchmarks, not just the widely used London fix. “A more complete implementation of the recommendations, particularly regarding other FX benchmarks, would increase the likelihood of maintaining and extending the improvement already seen. Regulators and FX market participants must remain focussed on achieving such an outcome,” the report says.

There has been good progress on improving transparency among the largest market participants, and for the most popular benchmarks, but that there is room for improvement among smaller players and less high-profile benchmarks, the report notes. Similarly, it notes that that effort to separate dealers’ fixings business from other areas of the business are being taken by the larger firms and in the most active markets, “but again there is room for further implementation in other areas of the FX market.”

There is also work underway to improve market conduct practices, both within individual firms and throughout the market, the report notes. “While many index providers and end-users have increased their focus on the due diligence around FX benchmark use, there is scope for greater follow-through on this on the part of some market participants,” it says.

The FSB says that it will continue to monitor progress in this area, and work with authorities and industry bodies to ensure continued enhancements to FX benchmarks and trading.