How We Do It: Conduct & Ethics

The Conduct & Ethics Committee, jointly chaired by Gareth Murphy and Alison Higgins, examines conduct matters covering behaviour, controls, oversight functions and methodologies across wholesale markets. The Committee has recently published a Statement of Good Practice on Unauthorised trading and also re-examined front-office supervision in the light of developments in how supervision is conducted. Other areas of recent focus include how firms collect and use conduct and culture management information, and how the 3 Lines Model can be applied more widely in risk management.

“FMSB is a highly effective forum for bringing together senior practitioners from across wholesale markets to develop industry standards and guidance. Cross-industry collaboration on conduct and ethics continues to be of vital importance as markets evolve and is often a better approach than additional regulation.”

Gareth Murphy, FMSB Advisory Council Member, Co-Chair of the FMSB Conduct & Ethics Committee and Group Chief Risk Officer at Aberdeen Group plc

“I am delighted to be co-chairing FMSB’s Conduct & Ethics Committee with Gareth. The issue of unauthorised trading is particularly pertinent amid rapid developments in technology and our working group on this topic is already developing good practice guidance to support firms in managing these risks.”

Alison Higgins, Co-Chair of the FMSB Conduct & Ethics Committee and Global Head of Control, Financial Markets Head, Markets (UK, Europe and America) at Standard Chartered

Work in Progress

Non-financial risk

Non-financial risk (NFR) is a core component of enterprise-wide risk management and has become an increasingly important driver of firms’ strategic planning and decision-making. Evolving market expectations and regulatory developments have contributed to divergent approaches to NFR governance, policies, processes and supporting infrastructure across firms and jurisdictions. At the same time, the effective identification, escalation and prioritisation of non-financial risks may be hindered by organisational design, fragmented accountability and other challenges to robust oversight. This work will seek to identify areas where FMSB could support greater clarity and consistency in market practice, including consideration of strategy, governance, culture and the balance between behavioural considerations and controls.

Non-financial misconduct

In October 2024, the FCA published the findings of its culture and non-financial misconduct survey, highlighting themes including governance, management information, detection effectiveness, confidentiality agreements, whistleblowing and regulatory references. FMSB’s work will seek to promote a common understanding of good practice in some of these areas and support continued cross-industry improvements in conduct and behaviour.