Written on: 2 June 2021

2 June 2021 – The FICC Markets Standards Board (FMSB) has today issued its 2020 Annual Report setting out the progress made to enhance standards of behaviour in the wholesale fixed income, currencies and commodities (FICC) markets and its priorities for the year ahead.

FMSB is a private sector, practitioner-led organisation whose membership collectively accounts for a substantial share of the business conducted in wholesale FICC markets worldwide.

Despite the enormous challenges faced by FMSB’s members and its Secretariat in navigating the turbulence of 2020, FMSB made significant progress during the year. It has been its most productive year since it was formed in 2015, following the Fair and Effective Markets Review, which was conducted jointly by HM Treasury, Bank of England, and Financial Conduct Authority.

A significant amount of work in progress has been undertaken, including:

  • Developing and publishing in Transparency Draft, Standards on the execution of large trades in FICC markets and on the sharing of investor allocation information for new issuances;
  • Exploring LIBOR benchmark reform and the remaining risks and issues that could arise as the industry transfers to alternative risk-free rates, with the publication of a Spotlight Review and the commencement of the development of a second one focusing on back book transition;
  • Setting out expected behaviours of market participants when using or issuing Term SONIA products, with the commencement of the development of a Standard on the use of Term SONIA reference rates;
  • Finalising a series of four Spotlight Review publications on FICC market structure and the impact of regulatory and technological change on the fairness and effectiveness of wholesale markets;
  • Identifying and capturing risks arising from remote working focusing on areas with impact the fairness and effectiveness of wholesale FICC markets, and considering mitigants or strategies to manage those risks; and
  • Continuing with the workstreams focused on the precious metals markets.

Mark Yallop, Chair of FMSB said:

“Despite the challenges presented by the COVID-19 pandemic, we worked extensively with our members and others to maintain a high level of productivity during 2020. Ten publications in support of our purpose: to strengthen trust in wholesale FICC markets by raising worldwide standards of conduct for all participants; enhancing overall transparency, fairness and effectiveness, reflect the continued strong engagement, dedication and insight provided by market practitioners across our member firms. I would like to thank all our members and their people for the strong commitment and support received in a year like no other.

2021 has already seen the publication of some important pieces of work on LIBOR transition and the use of term risk-free rates as well as the finalisation of the Standard on the execution of large trades in FICC markets. We are continuing to scan the horizon for new emerging vulnerabilities, which will form the basis of our future work.”

FMSB continues to receive strong support from the Bank of England and the Financial Conduct Authority. Andrew Bailey and Nikhil Rathi expressed their support for the work of FMSB in the Annual Report:

Andrew Bailey, Governor of the Bank of England, said:

“As I have said in previous years, FMSB performs an important role in wholesale markets, shedding light on best practices in areas of genuine uncertainty. Its continuing work on LIBOR transition has been constructive, both in supporting the migration of new business and back-book transactions, and developing principles for the use of Term SONIA. FMSB has shown in 2020 the value of the private sector using its expertise in conjunction with regulators, developing high-quality, practical protocols for the conduct of business. I look forward to the FMSB’s future contributions as it continues its mission to improve the transparency of wholesale markets.”

Nikhil Rathi, CEO of the Financial Conduct Authority, said:

“FMSB’s private sector members, drawn from across markets, play an important complementary role to that of the FCA and other regulators around the world. I look forward to continue working with them on important market transparency topics, including the growing role of new technology in markets, the development of green finance to support the transition to a low carbon economy, and the completion of the transition away from LIBOR.”        

The full annual report is available to view at fmsb.com.

Media contacts
Freddie Barber
+44 207 379 5151

Notes to Editors

1) The Fixed Income, Currencies and Commodities Markets Standards Board (‘FMSB’) is practitioner led, funded by members and operated by the major participants in wholesale markets to improve standards of conduct in wholesale fixed income, currencies and commodities (FICC) markets. It aims to bring transparency to grey areas in the wholesale FICC markets by identifying emerging vulnerabilities, clarifying and documenting practice and agreeing standards to improve conduct and market behaviour. Ensuring that wholesale FICC markets are transparent, fair and effective for all participants is at the heart of FMSB’s mission.

FMSB Standards set out Core Principles and accompanying guidance on the most important aspects of practice where ambiguity risks undermining the transparency, fairness and effectiveness of markets.

FMSB Statements of Good Practice set out clear expectations and guidance on good practice in relation to broader areas of uncertainty in wholesale FICC markets. 

FMSB Spotlight Reviews encompass a broad range of publications used by FMSB to illuminate important emerging issues in FICC markets. Drawing on the insight of members and industry experts, they provide a way for FMSB to surface nascent challenges market participants face and may inform topics for future work. Spotlight Reviews will often include references to existing law, regulation and business practices. However, they do not set or define any new precedents or standards of business practice applicable to market participants. 

All FMSB publications are available on the FMSB website at fmsb.com/our-publications/

2) Setting up the FMSB was one of the main recommendations from the Fair and Effective Markets Review (FEMR), which was conducted by HM Treasury, the Bank of England, and the Financial Conduct Authority.  

FEMR set FMSB four strategic goals: 

  • Identifying global market vulnerabilities through scanning the horizon for emerging business practice risks. 
  • Developing best market practice through the production of standards and other materials that create a common understanding. 
  • Driving global adherence through ensuring standards are comprehensible and practical. 
  • Developing consistent approaches to market practices through identifying gaps and inconsistencies in existing regulatory standards and working with other standards setting bodies. 

3) FMSB has a Standards Board drawn from senior executives from across wholesale markets, from corporate clients, asset managers, sell-side participants and intermediaries and infrastructure providers such as exchanges and custodians. In specialist, focused committees, subcommittees and working groups, industry experts debate issues and develop FMSB Standards and Statements of Good Practice, and undertake Spotlight Reviews that are made available to the global community of FICC market participants and regulatory authorities. 

4) FMSB members bring together sell-side investment banks, buy-side asset managers, market infrastructure providers and exchanges, custodians and users of the market such as corporates. This constitution is unique.  

The member firms are listed and available on the FMSB website at fmsb.com/who-we-are/ 

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