Today the industry-led Post-Trade Task Force publishes its report “Charting the Future of Post-Trade”. The FICC Markets Standards Board (FMSB) has agreed to take the Task Force’s work forward through FMSB’s new Post-Trade Committee.
Announced in a joint press release with the Bank of England on 21 April 2022, the Report sets out some key challenges where change would be particularly impactful in current post-trade processes. It focuses on three core areas (non-economic trade data, client onboarding and uncleared margin), and makes recommendations to address these issues.
David Hudson, Post-Trade Task Force Chair and Co-Head of Digital & Platform Services, J.P. Morgan, said:
“Post-trade systems and processes are the lifeblood of the financial system but these are also areas where innovation has lagged. Failure to innovate will inevitably raise the cost of financial services and pose risks to operational resilience. The Task Force has made great progress over the past year to arrive at the tangible recommendations set out in this report, which tackles many of the key problems in post-trade. Knowing that we have a critical mass of market participants engaged in this initiative, I am hopeful that this will create a step change in how we think about these issues.”
Myles McGuinness, FMSB Chief Executive Officer, said:
“FMSB taking this work forward will allow key Post-Trade Task Force recommendations to be adopted by the market at pace. Through our membership, which is made up of all participants in wholesale markets, and our unique standards adherence process, FMSB is well placed to build on the Task Force’s output and embed it in the industry. We intend to follow the Task Force’s established areas of focus on i) Non-Economic Trade Data (LEIs) ii) Client on-boarding, and iii) Uncleared Margin. We will also work with other practitioner groups who focus on specific aspects of the Task Force’s work to ensure the final output reflects industry best practice.”
Andrew Hauser, Executive Director for Markets at the Bank of England, said:
“Harnessing new technologies and improved processes to improve the resilience of the financial system as a whole was one of the priorities identified in the Bank of England’s response to the Future of Finance report in 2019. Following that report, we convened a Post Trade Technology Market Practitioner Panel to scale the overall challenge, and identify three specific areas where change was both pressing and feasible. The Bank of England welcomes the recommendations of the Task Force for action in those areas, which amongst other things encourage wider adoption of efficient best practices, greater standardisation, and less duplication – and look forward to the work of the FMSB.”
Edwin Schooling Latter, Director of Markets and Wholesale Policy and Wholesale Supervision at the FCA, said:
“The FCA is encouraged by the progress the Task Force has made on this agenda. This work is important to help support the efficient, effective functioning of wholesale markets. We are pleased that the FMSB will be taking forward the work on the Task Force’s recommendations.”
Notes to editors
1. The industry-led Post-Trade Task Force was established by the Post-Trade Panel following its 2020 report The Future of Post-Trade, to bring together experienced financial markets participants currently active in carrying out post-trade processes in order to improve the efficiency and resilience of these processes.
2. The Fixed Income, Currencies and Commodities Markets Standards Board (FMSB) is a standards setting body for the wholesale fixed income, currencies and commodities (FICC) markets. Created out of the Fair and Effective Markets Review (FEMR) in 2015, FMSB brings together its members from buy-side, sell side, corporate issuer and infrastructure provider organisations to develop standards, spotlight reviews and statements of good practice that raise standards of behaviour, competence and awareness – to promote the fairness and effectiveness of wholesale financial markets.
Following today’s announcement, FMSB’s members will form a Post-Trade Committee with three working groups to consider the potential implementation of the Post-Trade Task Force’s recommendations within FMSB’s governance structure. The working groups are: Non-Economic Trade Data, Uncleared Margin and Client Onboarding.
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Last updated 25 April 2022