Standards & Publications

Our outputs are Standards, Statements of Good Practice, and Spotlight Reviews developed by our membership and designed to illustrate best practice in areas of uncertainty to all market participants. Transparency Drafts are published for comment before the document is finalised.

Publication NameTypeDate of Initial ReleaseDates of Comment PeriodDate of Final Release
1Reference Price Transactions standard for the Fixed Income marketsStandard30-Jun-1630-Jun-16 to 8-Sep-1621-Nov-16
2Binary Options standard for the Commodities marketsStandard22-Jul-1622-Jul-16 to 14-Oct-1621-Nov-16
3New Issue Process standard for the Fixed Income marketsStandard18-Nov-1618-Nov-16 to 17-Jan-1702-May-17
4Surveillance Core Principles for FICC Market Participants: Statement of Good Practice for Surveillance in Foreign Exchange MarketsStatement of Good Practicen/an/a08-Dec-16
5Statement of Good Practice for FICC Market Participants: Conduct TrainingStatement of Good Practicen/an/a08-Dec-16
6Monitoring of written electronic communications Statement of Good Practice for FICC Market ParticipantsStatement of Good Practicen/an/a15-Sep-17
7Front Office Supervision Statement of Good Practice for FICC Market ParticipantsStatement of Good Practicen/an/a15-Sep-17
8Risk Management Transactions for New Issuance StandardStandard25-Oct-1725-Oct-17 to 20-Dec-1703-Jul-18
9Secondary Market Trading Error Compensation StandardStandard20-Mar-1820-Mar-18 to 20-Jun-1828-Jan-19
10Suspicious Transaction and Order Reporting Statement of Good Practice for FICC Market ParticipantsStatement of Good Practice04-May-1804-May-18 to 03-Aug-1815-Jan-19
11Information & Confidentiality for the Fixed Income and Commodities markets Statement of Good PracticeStatement of Good Practice01-Jun-1801-Jun-18 to 31-Aug-1803-Oct-19
12Behavioural Cluster Analysis – Misconduct Patterns in Financial MarketsSpotlight Reviewn/an/a27-Jul-18
13Misconduct Patterns in Financial Markets – Selected Case StudiesSpotlight Review (Case Studies)n/an/a27-Jul-18
14Database – Market Abuse and ManipulationSpotlight Review (Database)n/an/a27-Jul-18
15Conduct Risk in Market Transactions Statement of Good PracticeStatement of Good Practice27-Jul-1827-Jul-18 to 26-Oct-1828-Mar-19
16Conflicts of Interest Statement of Good PracticeStatement of Good Practice20-Jun-1920-Jun-19 to 06-Sep-1914-Oct-19
17Statement of Good Practice for Participation in Sovereign and Supranational Auctions in Fixed Income MarketsStatement of Good Practice02-Dec-1902-Dec-19 to 27-Jan-2014-Jul-20
18Emerging themes and challenges in algorithmic trading and machine learningSpotlight Reviewn/an/a23-Apr-20
19The critical role of data management in the financial systemSpotlight Reviewn/an/a11-May-20
20LIBOR transition: Case studies for navigating conduct risksSpotlight Reviewn/an/a11-Jun-20
21Algorithmic trading in FICC markets: Statement of Good Practice for FICC market participantsStatement of Good Practice (Transparency Draft)24-Jun-202024-Jun-2020 to 21-Aug-2020TBC
22Examining remote working risks in FICC marketsSpotlight Reviewn/an/a27-Jul-20
23Examining remote working risks in FICC markets – Risk registerSpotlight Review (Risk register)n/an/a27-Jul-20
24Monitoring FICC markets and the impact of machine learningSpotlight Reviewn/an/a03-Aug-20

Transparency Drafts

All Standards and some Statements of Good Practice are published for feedback as Transparency Drafts. FMSB seeks comment on Transparency Drafts. Please click on the link below or email comments to secretariat@fmsb.com.

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Algorithmic trading in FICC markets: Statement of Good Practice for FICC market participants Transparency Draft

This Statement of Good Practice draws on the extensive work conducted by regulators to date and seeks to further enhance the integrity and effective functioning of FICC markets by promoting good conduct and governance practices for participants engaged in algorithmic trading across all FICC asset classes and markets, in particular […]


Standards

FMSB Standards are intended to reduce the continuing uncertainty about acceptable practice in opaque and unregulated areas, which is a hazard for FMSB members (and other market participants). FMSB members are expected to adopt FMSB Standards in their businesses (where relevant) and to evidence this through an annual Statement of Commitment – see Adherence for more information.

Secondary Market Trading Error Compensation Standard

This Standard sets out expected behaviours that are designed to improve the practice regarding the payment of compensation for trading errors.

Risk Management Transactions for New Issuance Standard

The Risk Management Transactions for New Issuance Standard sets out expected behaviours that are designed to improve the practice and awareness regarding risk management activity that is conducted in and around the new issuance of bonds.

These improvements should enhance the fairness and effectiveness of the process for all market participants.

New Issue Process Standard for the Fixed Income markets

This Standard sets out enhancements to existing practices that are designed to improve the new issue process continuum (from the granting of a mandate to the publication of statistics), which improvements should enhance the fairness and effectiveness of the process for all participants, including issuers, investors and lead managers.

Binary Options for the Commodities Markets_Updated

The Binary Options standard for the Commodities markets Standard aims to describe the characteristics of a type of transaction which is used by participants in the Commodities markets and to set out certain expected behaviours of wholesale market participants that enter into them.

Reference Price Transactions for the Fixed Income Markets – Updated

This Standard aims to describe the characteristics of a Reference Price Transaction (“RPT”) and to set out certain expected behaviours of wholesale market participants that enter into them.


Statements of Good Practice

Statements of Good Practice reflect FMSB’s view of what constitutes good or best practice in the areas covered by the Statement of Good Practice in question. FMSB members are expected, and other firms are invited, to consider their own practices in light of relevant Statements of Good Practice and make any changes to such practices that they deem to be appropriate.

Conflicts of Interest Statement of Good Practice

This Statement of Good Practice aims to provide practical, working level guidance and examples for market participants to draw on, as they consider ways to prevent, manage and mitigate conflicts of interest that arise within their firms.

Conflicts of interest may arise between (i) clients; (ii) a firm and its client(s); and (iii) employees and a firm/client(s). These conflicts have the potential to be detrimental, not only to the firms involved, but to clients and the financial markets more generally. Dealing with them effectively is one way in which instances of this kind of market misconduct can be minimised.

Conduct Risk in Market Transactions Statement of Good Practice for FICC Market participants

The Conduct Risk in Market Transactions Statement of Good Practice for FICC Market participants sets out Good Practice Statements for the identification of conduct risks in market transactions using this methodology. The identification of conduct risk is an important role undertaken by the Front Office, as well as by control and oversight functions, and firms should consider their own practices in light of this Statement of Good Practice and make any changes to such practices as they deem appropriate.

Suspicious Transaction and Order Reporting Statement of Good Practice for FICC Market Participants

Suspicious Transaction and Order Reporting Statement of Good Practice for FICC Market Participants covers the identification of suspicious orders and transactions and their reporting to relevant regulators (the FCA in the case of the UK). Many of the practices described relating to the identification and investigation of suspicious activity will be relevant to many jurisdictions.

Monitoring of written electronic communications Statement of Good Practice for FICC Market Participants

The Monitoring of written electronic communications Statement of Good Practice for FICC Market Participants is designed to be relevant to all front-office and control or support function personnel who are active participants in the FICC markets and to those who are engaged in the monitoring and surveillance of those activities.

Front Office Supervision Statement of Good Practice for FICC Market Participants

The Front Office Supervision Statement of Good Practice outlines good practice for the Supervision of front office activities that may directly affect the functioning of FICC markets and/or conduct with market participants.

Conduct Training

This Statement of Good Practice sets out a number of Core Principles relevant to conduct training, together with good practices that are currently used in Member Firms to achieve the outcomes specified in these Core Principles.

Surveillance in Foreign Exchange Markets

Set out in this document are a set of core principles for surveillance that firms may wish to adopt in order to identify, determine and establish an effective surveillance function.

Statement of Good Practice for Participation in Sovereign and Supranational Auctions 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. This Statement of Good Practice (SoGP) describes the way in which sovereign and supranational auctions are typically conducted in […]


Spotlight Reviews

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 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.

Monitoring FICC markets and the impact of machine learning

Market surveillance in FICC has undergone, and continues to undergo, significant change as a result of regulation, the evolution of market structure, and technological developments. This Spotlight Review considers these structural and technological changes, in particular the emergence of machine learning trading strategies, and sets out some of the challenges associated with these developments for surveillance teams in FICC markets. The review then examines the role of technology as a potential solution to these challenges, creating as it does opportunities to improve market surveillance through the application of machine learning.

This review outlines:

  • factors driving the pace of change in market surveillance;
  • the acute impact of data on surveillance effectiveness;
  • surveillance of complex algorithms and machine learning;
  • employing machine learning to empower surveillance; and
  • the vital role agility plays in effective surveillance.

FMSB also issued a press release.

3 August 2020

Examining remote working risks in FICC markets

Following COVID-19 being declared a global pandemic and the closure of many offices, FMSB formed a working group of members and other interested market participants to consider the impacts of financial services activities being undertaken by a workforce which is widely distributed and using remote working.

The working group set about identifying and capturing the main priorities from a wide range of risks that arise from the new working environment, with a focus on areas which impact the fairness and effectiveness of wholesale FICC markets, and then to consider mitigants or strategies to manage these risks.

This Spotlight Review includes a risk register that outlines over 40 risks drawn from the experience and observations of the working group for market practitioners to use when conducting their own risk assessments.

The risk register is available at fmsb.com/wp-content/uploads/2020/07/risk-register-examining-remote-working-risks-in-ficc-markets.xlsx

FMSB also issued a press release.

27 July 2020

LIBOR transition: Case studies for navigating conduct risk

The FMSB Spotlight Review ‘LIBOR transition: Case studies for navigating conduct risks’ includes good practice observations and practical case studies to support firms when considering the risks to fairness and effectiveness as the market moves to risk-free rates as more sustainable and representative benchmarks.

FMSB also issued a press release.

11 June 2020

The critical role of data management in the financial system

The FMSB Spotlight Review ‘The critical role of data management in the financial system’ examines the crucial role of data management in the stability and resilience of wholesale FICC markets and financial systems.

FMSB also issued a press release.

11 May 2020

Emerging themes and challenges in algorithmic trading and machine learning

The FMSB Spotlight Review ‘Emerging themes and challenges in algorithmic trading and machine learning’  highlights important emerging issues in this area to assist market participants in considering how to address challenges that may arise.

FMSB also issued a press release.

23 April 2020

FMSB Behavioural Cluster Analysis – Misconduct Patterns in Financial Markets

FMSB BCA research includes the analysis document and selected case studies as well as the BCA database of misconduct cases.

27 July 2018

Misconduct Patterns in Financial Markets – Selected Case Studies

FMSB BCA research includes the analysis document and selected case studies as well as the BCA database of misconduct cases.

27 July 2018

Market Abuse and Manipulation – Database of Cases

FMSB BCA research includes the analysis document and selected case studies as well as the BCA database of misconduct cases.

27 July 2018


Work In Progress

Standards, Statements of Good Practice and Spotlight Reviews are produced by FMSB’s cross-sectoral committees, sub-committees and working groups, each of which follows a rigorous production, review and transparency process. See our Organisational structure for more information.

Information about each of FMSB’s active groups is set out below. For an overview of all activity please see our ‘Progress on a page’.

Behavioural Conduct Analysis (BCA) Committee

Chair: David Flowerday, EMEA Head of FICC Compliance at Citigroup Global Markets Limited

The BCA Committee was reconvened in April 2020 to produce a second edition of FMSB’s seminal Behavioural Cluster Analysis, published in July 2018. The primary aims of the second edition are to bridge the gap between the analysis for the 2018 publication and today to include new misconduct cases, and to incorporate feedback on the use and engagement with the BCA from practitioners and other users. The group is conducting an analysis of cases, and drafting text with the ambition to publish an updated document in Q4 2020.

Conduct and E-Commerce Working Group

Chair – Chris Dickens, HSBC

See above – Algorithmic Governance Working Group under the ETTC.

Conduct and Ethics Sub-Committee

Chair: Tracey McDermott, Group Head of Corporate Affairs, Brand & Marketing, Conduct, Financial Crime and Compliance at Standard Chartered

Tracey McDermott has agreed to Chair the Conduct and Ethics Sub-Committee.

Tracey will be considering the priorities for the sub-committee which reviews matters relating to governance, controls, oversight functions and methodologies across markets. This will include the work on remote working risks and controls, and lines of defence.

Electronic Trading and Technology Committee (“ETTC”)

Co-Chairs:

Zar Amrolia, Co-CEO, XTX Markets and Member of the FMSB Advisory Council and FMSB Standards Board Member

Ciara Quinlan, Head of Electronic Principal Trading FX, Rates & Credit, UBS and FMSB Standards Board Member

The ETTC is addressing two topics in separate Working Groups covering Trading Platforms and Algorithmic Trading – Governance and Conduct.

Trading Platforms Working Group – The Working Group is preparing a Statement of Good Practice aimed at promoting greater transparency as to how both bilateral and multilateral electronic trading platforms operate and seeking to harmonise the disclosures made by all trading platforms to their participants or prospective participants across FICC markets and asset classes. Increased transparency and standardisation of disclosures should in turn help minimise disputes between trading platform operators and their participants.

Algorithmic Governance Working Group – This Statement of Good Practice (SoGP) brings together the work done in 2018 by both the Algorithmic Governance Working Group and the Conduct and E-Commerce Working Group. The combined paper sets out 10 Good Practice Statements in relation to both the governance of, and management of conduct risks associated with, the use of algorithms by member firms in their FICC business activities. The SoGP was published as a Transparency Draft on 24 June. FMSB members and other interested parties are invited to comment on the proposed Statement of Good Practice. This consultation will run until Friday 21 August 2020.

Energy Working Group

Chair: Jonathan Hill, Regulatory Compliance Manager, BP

The Energy Working Group was set up to review the fairness and effectiveness of business practices in the wholesale energy markets. An independent review of existing market practices has been undertaken to refine the workplan for the Working Group.

IBOR Transition Working Group

Chair: Chris Salmon, Global Chief Control Officer of Markets, HSBC and FMSB Standards Board Member

In Q4 2019, the Standards Board decided that there was merit in FMSB setting up an IBOR Transition Working Group to consider the conduct risks arising from the transition from IBOR to near risk-free rates for FICC market participants and how participants may seek to manage these conduct risks.

The IBOR Transition Working Group first met in January 2020 to discuss the key conduct risks that firms from a cross-section of the market including sell-side, buy-side and corporates face as a result of the transition.

On 11 June 2020, the Working Group published a Spotlight Review ‘LIBOR transition: Case studies for navigating conduct risk’ which includes good practice observations and practical case studies to support firms when considering the risks to fairness and effectiveness as the market moves to risk-free rates as more sustainable and representative benchmarks. It is intended that further papers on this topic will be released focusing on additional risks that may arise at different points in the transition, in particular the conduct risks associated with transitioning back books.

Large Trades Working Group

Chair – Michael Dawson, Head of Liquidity & FX, Royal Dutch Shell

The Large Trades Working Group is developing an FMSB Standard for market participants in connection with the execution of large trades for wholesale FICC markets. The Standard, when final, will be a valuable source of information for market participants, including clients, when executing large trades. Topics that will be addressed include disclosure, pre-hedging, agency and principal dealing, and buy-side obligations.

Market Structure

We have published the two Spotlight Reviews: Emerging themes and challenges in algorithmic trading and machine learning in April and The critical role of data management in the financial system in May this year. We are aiming to issue the remaining publications in the market structure series in the summer.

Metals Working Group

Chair – David Tait, CEO of World Gold Council and Independent Member of the FMSB Standards Board

This Working Group was set up to review the fairness and effectiveness of business practices in the wholesale metals trading markets. Its initial focus is on precious metals markets. The Working Group has identified nine market features, which have been arranged into three themes: i) transparency and price formation; ii) post-trade effectiveness; and iii) market practices. These will be used to identify the issues the Working Group will examine.

It is anticipated that the Metals Working Group will turn its attention to the base metals market in due course.

Rates Sub – Committee

Chair – Charles Bristow, Global Head of Rates Trading, J.P. Morgan and Member of the FMSB Standards Board Member

On 2 December 2019 the Rates Sub-Committee published a Statement of Good Practice for Participation in Sovereign and Supranational Auctions in Fixed Income Markets Transparency Draft. It describes the way in which sovereign and supranational auctions are typically conducted in Europe, the roles participants in those auctions play, the types of auction structure, orders and transaction types that are often utilised, and the different conflicts of interest that can arise for such participants. It includes Good Practice Statements relating to the management of those conflicts and certain other matters relevant to the conduct of participants in and around such auctions. The comments period for this Transparency Draft closed on 27 January 2020, and the Sub-Committee is finalising the paper for publication in the summer.

The Rates Sub-Committee is undertaking an exercise to identify its next focus for agreement with the Standards Board.

Remote Working Risks and Controls Group

Chair – Rosie Murphy Williams (independent)

The Group was set up in response to the impact of the COVID-19 pandemic on the operation of financial services activities with a workforce which is widely distributed and using remote working. FMSB is harnessing the diversity of its member firms and other interested parties to pool experiences and share observations of risk and in doing so to build a richer and more comprehensive understanding and response to the various risks that arise over time. Since its first meeting on 6 May 2020, the group has been working together to deliver its goal to identify and capture the universe of risks that arise from the widespread and prolonged period of remote working with its focus on areas where these risks impact the fairness and effectiveness of wholesale FICC markets and to consider mitigants or strategies to manage these risks.

Spreads Sub-Committee

Chair – Jonathan Brown, Head of Lending and Portfolio Management, EMEA, Barclays

The Spreads Sub-Committee is currently working on a Standard dealing with the sharing of new issue allocation information. It will set out the practice of sharing primary issuance allocation information, the rationale for doing so, and improvements to enhance the fairness and effectiveness of the market while maintaining confidentiality.


How does a typical Standard or Statement of Good Practice progress to publication?

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Annual Report

The FMSB Annual Report is published annually and sets out progress made by FMSB to enhance standards of behaviour in the wholesale fixed income, currencies and commodities (FICC) markets.

FMSB Annual Report 2019

The FMSB Annual Report 2019, published on 25 February 2020, sets out our progress and key activities in 2019, and an outline of our work for 2020.

FMSB Annual Report 2018

The FMSB Annual Report 2018, published on 18 March 2019, sets out further progress made to enhance standards of behaviour in the wholesale Fixed Income, Currencies and Commodities (“FICC”) markets in the period from 1 August 2017 to 31 December 2018.

FMSB Annual Report 2017

The FMSB Annual Report 2017, published on 20 September 2017, sets out progress made to enhance standards of behaviour in the wholesale Fixed Income, Currencies and Commodities (“FICC”) markets in the period from 1 August 2016 to 31 July 2017.