The Bank of England has launched a new voluntary code of conduct designed to promote ‘fairness and integrity’ in UK money markets. Although not legally binding, it is hoped senior managers will oversee the code’s implementation within financial firms. The code sets out key behavioural principles around ethics, information-sharing and trade execution, and helps to build trust and transparency; ‘cornerstones’ of financial transactions.
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) – comprising market participants from a wide range of banks and 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 should be embedded by the market by January 2018.
Chris Salmon, Executive Director for Markets and Chair of the Money Markets Committee, said: “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.”