Written on: 2 December 2019

2 December 2019: The FICC Markets Standards Board (FMSB) today issued a Transparency Draft of a new Statement of Good Practice for Participation in Sovereign and Supranational Auctions (‘SSAs’) in Fixed Income Markets.

A common way for government or supranational bonds to be issued is through a publicly announced auction. Auctions involve multiple parties/participants including issuers (debt management offices/agencies/treasuries), primary dealers, dealers and investors.

The interaction between the different roles and objectives of market participants, the issuer’s chosen price formation mechanism, type of auction system and differing transaction types can lead to conflicts of interest. These conflicts of interest may lead to behaviours that may be detrimental to fair and effective markets (as well as potentially breaching applicable law or regulation).

This Statement of Good Practice seeks to identify some of the key conflicts of interest that can arise, as well as setting out measures to enhance market transparency by providing clearly articulated information as to how SSAs work and identifying principles governing the management of conflicts that may arise. There are eight good practice statements which firms should consider when participating in these markets.

Charles Bristow, Chair of the FMSB Rates Sub-Committee and Global Head of Rates Trading at J.P. Morgan said: “This Statement of Good Practice has brought together issuers, dealers and investors from across the sovereign and supranational market to explain how the market functions, and the types of auctions, investor activity, and conflicts of interest that can arise through the normal course of business. It reflects a shared spirit of commitment to fair and effective markets, created through greater transparency, that countries and economies rely upon to receive the regular funding that they need in order to thrive.”

Martin Pluves, FMSB’s Chief Executive Officer said: “On behalf of its members, FMSB is very pleased to publish this latest Transparency Draft Statement of Good Practice for wider market consultation and feedback. The principles set out in this Statement make an important contribution to our work to raise standards of conduct at the core of capital markets in Sovereign and Supranational Debt Auctions.”

FMSB members and other interested parties are invited to comment on the proposed Statement of Good Practice. This consultation will run until 27 January 2020 with the final document expected to be published shortly thereafter.

This is the tenth Statement of Good Practice to have been published by FMSB since it was set up in 2015 in response to the Fair and Effective Markets Review with a mandate to improve conduct and raise standards in the wholesale fixed income, currencies and commodities markets.

All materials officially published by FMSB are available at www.fmsb.com

Media contacts


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Notes to Editors

1) The Fixed Income, Currencies and Commodities (‘FICC’) 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 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.

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

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. Reporting to the Standards Board are standing Committees addressing Market Practices, Codes & Standards Convergence, Conduct & Ethics, and Electronic Trading and Technology. The Market Practices Committee is split into four asset-class specific committees. There is also an Advisory Council representing the interests of member firms.

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:

  • AstraZeneca
  • Australia and New Zealand Banking Group
  • BAE Systems
  • Bank of America Merrill Lynch
  • Bank of New York Mellon
  • Barclays
  • BHP
  • BlackRock
  • Bloomberg
  • BNP Paribas
  • BP
  • Citadel Securities
  • Citigroup Global Markets Limited
  • Crédit Agricole CIB
  • Credit Suisse
  • Deutsche Bank
  • Euronext FX Inc.
  • Goldman Sachs
  • HSBC
  • Invesco
  • JP Morgan
  • Legal & General Investment Management
  • Linklaters (Legal Advisor)
  • Lloyds Banking Group
  • London Stock Exchange Group
  • M&G Investment Management Limited
  • MarketAxess
  • Morgan Stanley & Co. International plc
  • National Australia Bank
  • Nomura
  • RBS
  • Refinitiv
  • Rio Tinto
  • Royal Bank of Canada
  • Royal Dutch Shell
  • Royal Mail Group
  • Société Générale
  • Standard Chartered
  • Standard Life Aberdeen
  • Tradeweb
  • Tradition
  • UBS
  • Vodafone
  • XTX Markets

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