The FXPA spread grid guidance published by the Foreign Exchange Professionals Association (FXPA) makes one point with unusual clarity: a spread grid is a reference tool, not a pricing commitment, and confusing the two causes real harm to trading relationships.
The industry body developed the paper through its Buy Side Working Group, drawing input from participants across the global FX market. The core message, as FinanceFeeds reports, is that spread grids describe expected execution costs under normal market conditions. They are not firm quotes and carry no contractual weight.
What the FXPA Spread Grid Guidance Actually Says
Spread grids, for those unfamiliar, are tables that summarise a liquidity provider’s expected bid-offer spreads (the gap between the buy and sell price) across different currency pairs, trade sizes, and market conditions. Traders and portfolio managers use them to estimate transaction costs before they execute.
The problem, FXPA argues, is that firms have drifted into treating these grids as executable benchmarks. When a trade comes back at a wider spread than the grid suggested, disputes follow. According to Traders Magazine, the guidance stresses that grids are intended to convey indicative, contextual information only. Volatility, liquidity shifts, and trade size can all push actual execution well away from any grid reference, and the grid was never designed to account for those conditions in real time.
Misinterpreting grids as firm pricing has, in practice, created friction between buy-side clients and the sell-side desks providing liquidity. FXPA expects the guidance to reduce that friction by establishing a shared vocabulary around what grids can and cannot tell you.
The Working Group Behind the Paper, and What Should Replace Grids
Richard Turner, Senior Trader at Insight Investment, chairs the Buy Side Working Group that produced the document. Insight joined FXPA as an Advisory Member, with Turner representing the firm. He has a noted specialisation in transaction cost analysis (TCA), the practice of measuring actual execution costs against a benchmark to assess quality, as Markets Media reports.
Turner’s quote from the guidance captures the central tension: ‘Spread grids have been a longstanding feature of the FX market, providing valuable context around expected trading costs and liquidity conditions. However, as execution workflows become increasingly data-driven and sophisticated, it is important that market participants understand both what spread grids can tell us, and what they cannot.’
That emphasis on TCA is not incidental. The paper argues that firms should anchor their execution assessments in observed outcomes rather than static grids. Request-for-quote (RFQ) histories, post-trade analytics, and live execution data all give a more accurate picture of pricing quality than any grid snapshot. Grids can still provide useful context, but only when combined with real transaction records.
This is the second piece of industry guidance FXPA’s Buy Side Working Group has produced. It previously issued guidance on FX internalisation in algorithmic execution, again with the aim of improving transparency between counterparties. The pattern is consistent: the working group is trying to close gaps between how participants on each side of a trade understand the mechanics of execution.
FXPA’s current leadership includes Susan Dauber of Euronext FX as Chair, Chip Lowry of State Street as Vice Chair, Lauren Rosborough Watt of CalPERS as Secretary, and Paul Houston of CME Group as Treasurer, according to the FXPA leadership page. That mix of exchange operators, asset managers, and infrastructure providers reflects how broadly the spread grid question cuts across the market.
For retail investors, the practical relevance is indirect but real. Pension funds, multi-asset funds, and global equity trackers all incur FX costs when they rebalance across currencies. If the fund managers running those vehicles are working from a clearer understanding of what their liquidity providers’ spread grids mean, the execution they achieve should, over time, be more consistent with the costs they expect. TCA data, rather than a static reference table, is the tool that tells them whether it actually is.
The guidance arrives as FX trading continues its shift toward systematic, data-driven workflows. The next test of whether it lands will be in the post-trade analytics: if RFQ outcomes and execution records start converging more tightly with pre-trade cost estimates, the paper will have done its job.
