Tag: Conduct


FCA Outlines Plans for Wholesale Financial Markets

The UK’s Financial Conduct Authority has outlined its plans for whole financial markets in its 2018-19 Business Plan, which was published this week.
The FCA notes that wholesale financial markets are “complex” and have undergone large-scale and complex regulatory change, including the Markets in Financial Instruments Directive (MiFID II) and the Market Abuse Regulation (MAR). It adds that technology and innovation are affecting markets’ business models and their users have different levels of sophistication. It highlights insider trading, market manipulation and other forms of market abuse as activities of interest.

Bank of England Commits to Three Codes of Conduct

The Bank of England has today issued Statements of Commitment to the FX Global Code, the UK Money Markets Code and Global Precious Metals Code.
The Bank says that in issuing the statements, it is demonstrating that it is committed to adhering to the principles of these Codes when acting as a market participant in the relevant markets, and that its internal practices and processes are aligned with the principles of the Codes.
“The principles of these Codes are important in promoting the integrity and effective functioning of these respective markets,” it states.

ACI Retires The Model Code

One of the major codes of conduct developed around the turn of the century is being retired following the successful launch of the FX Global Code of Conduct. In a statement, ACI – The Financial Markets Association says it is withdrawing its Model Code, which was first released in 1999 and subsequently updated on several occasions in order to provide national associations and other stakeholders with uniform language regarding the current status of the Model Code, the re-writing of which, was put on hold in 2016.

And Finally…

The last week has seen plenty of activity concerning conduct-related issues. We have had the first trader plead guilty to collusion and manipulation, a group of banks have had their fines for the same misconduct ratified and a trader has – rarely – lost an unfair dismissal case. As the lawyers continue to pick over the carcass of the conduct issue, the industry needs to focus on renewal and central to this is the establishment of a proportional sense of realism – both on the part of individuals and their employers.

Shafik Calls for “Ethical Lift”

Outgoing deputy governor of the Bank of England, Manouque Shafik has called for a move from what she terms “an ethical drift” to an “ethical lift”.
Speaking at the New York Fed conference on conduct and behaviour, Shafik accepted that misconduct in financial markets is nothing new, but argued the wave of misconduct which has emerged in the aftermath of the financial crisis is different. She highlighted the benefits of the UK’s blend of “hard law” and “soft law” when establishing a compliance framework.

Dudley Repeats Call for “Banker Database”

The president of the Federal Reserve Bank of New York, William Dudley, has reiterated his call for a database of banker misconduct that will “stop rolling bad apples”.
Speaking to open a New York Fed conference on culture and behaviour in financial services, Dudley, who was expressing his own views, observed that the evidence is pervasive that deep-seated cultural and ethical problems have plagued the financial services industry in recent years. He further hinted that the industry needs more than principles to reform conduct and that any guidelines need teeth.

And Finally…

Where to start? Well I will get to those industry “experts” who have been arguing with me for the past two weeks (actually months) that liquidity is great in FX later, for now let’s kick off by getting to the crux of the issue. This is not necessarily about whether algos ran wild, or someone ran an option barrier, this is about a(nother) fundamental breakdown of the FX market structure.
The time has come to accept that what happened Friday morning in Asia is a mess of our own making; to take our heads out of the sand and at least acknowledge there is a problem with liquidity in FX markets.

FCA Cites “Real Improvements” in Banks’ FX Controls

Alongside last week’s publication of an update on the Fair and Effective Markets Review (FEMR), the UK’s Financial Conduct Authority (FCA) has separately published a progress report on its own FX remediation programme. The programme, which was launched in November 2014 following the issuing of a series of fines to banks in the FX market, […]

Markets Standards Board Publishes First Draft of FICC Standards

The Financial Markets Standards Board (FMSB), established in the wake of last years Fair and Effective Markets review (FEMR) process in the UK, has published its first draft standard aimed at improving conduct in FICC markets. The FMSB’s work started last year and was initially aimed at all FICC markets, however since the Bank for […]