Bank of England Releases Money Market Code of Conduct

The financial markets industry has another code of conduct
to conform with after the Bank of England released its new, voluntary, UK Money
Markets Code, which sets out the standards and best practice expected from
participants in the deposit, repo and securities lending markets.

The Code is underpinned by the key principle that
participants should always act in a manner to promote the integrity and effective
functioning of these markets. It also outlines six high-level principles
encompassing: ethics, governance, risk management, confidentiality, execution
and settlement.

The Bank of England’s Money Markets Committee (MMC) –
comprised of market participants from a wide range of banks, other financial
and non-financial institutions – has endorsed the Code.

A sub-group of those experienced market practitioners was
formed to draw up the Code and will remain in place as a permanent sub-committee
of the MMC to ensure that it remains relevant and up to date as markets evolve.

It is expected that the Code will be embedded by the market
by January 2018.

Chris Salmon, executive director for markets and chair of
the MMC, says, “The UK Money Markets Code sets out a clear, principles-based
framework for how all participants are expected to promote the integrity of the
deposit, repo and securities lending markets. It has been written by the
market, for the market. Participants should therefore embrace the new Code and
embed the high standards of behaviour it sets out.”

The new Code supersedes and substantively updates existing
guidance for participants in these markets provided by the NIPs Code, the Gilt
Repo Code and the Securities Borrowing and Lending Code.

“Voluntary codes of best practice can help to establish the
basis on which financial markets function, ensuring trust between participants,”
the Bank of England says. “This in turn creates an environment so that a fair,
effective and transparent market can flourish and in which, by adhering to such
codes, high standards of behaviour can be assured. The code sets out such
standards and the best practice expected from participants in the deposit, repo
and securities lending markets in the UK.” 

The Bank says it will align with the Global FX Code and
Precious Metals Code, which will be published on May 25.

The full Code can be accessed here.

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Twitter @Profit_and_Loss



Colin Lambert

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