LONDON (Reuters) - The first draft of a new global code of conduct for the $5 trillion a day currency market seeks to define better what traders can and cannot say to one another.

A U.S. one-hundred dollar bill (C) and Japanese 10,000 yen notes are spread in Tokyo, in this February 28, 2013 picture illustration. REUTERS/Shohei Miyano

Dozens of traders have been suspended or sacked and banks fined billions of dollars, following investigations into charges that dealers at major banks improperly shared information about client orders, in order to fix markets.

Banking and official sources told Reuters the new document had been circulated last week to market participants, industry representatives and major central banks.

On the basis of feedback over the next two to three weeks, the document should form the basis of a first full version of the code to be published in May, they said.

“The big areas where there is new material are around execution and information handling,” said one source familiar with the document, who asked not to be named.

“It is not a procedures manual, but it gives people a bit more clarity as to what is appropriate and what is not. It says here are some principles we expect people to follow and gives examples where needed.”

The investigations into market rigging have stifled how much bank sales people, traders and clients talk to each other online and over the phone, undermining what had been an integral part of how market participants did business.

The source said the document, which central bank foreign exchange committees have told members to keep confidential until at least March, aims to provide more of that daily contact.

“Some of us have moved on and created rules of operation which have given sales people more freedom. This (code) follows that,” said a senior manager with one major international bank, who has also been involved in drafting the document.

“Providing aggregated information, saying for example that the real money community is lined up this way or that, is broadly OK. But saying there are a whole bunch of stop losses at 1.10 on the euro is probably getting too specific.

“At the same time, it doesn’t go into hugely granular detail. It’s trying to give people principles and guidelines that firms can then go away and codify how they want.”

The publication of the document in May should mark the start of a potentially larger battle over the next year: how regulators intend to enforce adherence to its rules.

A third source said the code’s creation, and banks’ signing up to it, should give regulators more power to impose swift fines and other penalties on banks, without the sort of slow and expensive investigations that led to the round of fines last year.

It is unclear to what extent banks will be happy with this conclusion to the work, he said.