The first comprehensive global code of conduct to regulate the scandal-hit foreign exchange market will come into force in May 2017, central bank officials said on Wednesday.

Three years of revelations over the conduct of major banks in the world's single biggest financial market have seen dozens of traders suspended or fired and lenders fined billions of dollars for manipulating currency market benchmarks.

Work on the new code by a committee from the Bank for International Settlements (BIS), a forum for central banks based in Switzerland, is the latest effort to head off further abuses and restore faith that the $5 trillion a day market is run fairly.

It will deal with issues including how to deal with automatic stop loss orders, and the difference between when banks are making markets themselves and when they are acting as agents for clients, Reserve Bank of Australia assistant governor Guy Debelle told a briefing at the Bank of England.

Six codes of conduct currently in force will be scrapped in favour of the first global code whose scope will go beyond traders to include asset managers and trading platforms, a reflection of how the market is rapidly evolving.

This would go beyond the global preamble central bankers drew up last year to attach to existing codes.

"We are not trying to reinvent the wheel in this code, but build on what's there," Debelle said.

"There clearly needs to be a significant rebuilding of confidence in the way this market functions," added Debelle, who heads the BIS's markets committee.

Local "annexes" are envisioned to reflect specific national markets in some cases.

"The idea is this code will continue to evolve," Debelle said.

The allegations and fines so far have focused on traders at banks who sell their services to hedge funds and other market participants. Many in the market say this unfairly focused regulatory attention purely on the sell-side rather than customers as well.

New York Federal Reserve official Simon Potter stressed the code aimed to provide guidance to all parts of the market, including central banks, that are key players.

The officials said the code would need to keep pace with a market whose structure has shifted towards high-speed, computer driven trading from the traditional transactions between banks over the telephone.

"This is an entirely different market than it was five or six years ago, when (bank) dealers were the only ones making prices," said David Pluth, chief executive of CLS, which processes almost all spot forex trades.

Debelle said the biggest challenge was to devise ways of making banks and other participants stick to the new code.

Critics have said the measures taken by regulators to date fail to go far enough in changing the structure of the forex market and the culture on trading floors that led to the scandals.

The code won't have the status of formal, binding regulation and it will be up to governments how it could be enforced.

Britain has already made rigging of currency and other market benchmarks a criminal offence, and the European Union is also bringing in tougher punishments for market manipulation. - Reuters