UK Money Markets Code to rebuild trust 22 June 2017London Reporter: Drew Nicol
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The securities lending industry has been encouraged to back the new UK Money Markets Code, which was drafted to rebuild trust and confidence after the 2008 financial crisis.
Industry representatives drafted the code in partnership with the Bank of England (BoE) to replace the previous guidance, which has been judged to be outdated.
The previous code covered the foreign exchange (FX), securities lending and repo markets, but was not updated to keep pace with a rapidly changing marketplace.
The creation of the FX Global Code prompted the creation of the new market-driven code for securities lending, repo and deposits markets. Their structures broadly align as a result.
According to the BoE, the new code sets out best practice expected from participants in the securities lending, repo and deposits markets. It supersedes existing guidance in the incorporated codes of conduct.
By bringing these together, it will more clearly establish the framework for transacting in UK money markets in order to promote counterparty trust, fairness and overall market transparency.
The new code was also endorsed by the UK’s Money Markets Committee, a senior-level forum for market participants and the public authorities.
All UK money market participants have to commit to the principles of the code by 1 January 2018.
Commenting on the new code in April, ISLA CEO Andy Dyson said: “The code is a principles-based code that will provide a conduct based framework that market participants will adhere to."
“We fully endorse and support this new code which firms will need to be compliant with from 2018.”
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