London, 3 July 2018 – The FICC Markets Standard Board (FMSB) has today issued its Standard on Risk Management Transactions for New Issuance.
The Standard sets out several core principles relevant to risk management transactions connected with new issues in the fixed income markets. It identifies potential conduct risks created during these transactions, and describes appropriate behaviour to manage them.
This was previously issued as a transparency draft for comments from the market in October 2017.
Responding to feedback, a few minor changes and additions have been made. In particular:
• there is a more detailed explanation of the nature of the conduct risks in section III.4
• Core Principle 9 (dissemination of information) has been edited to avoid ambiguity and to refer only to Risk Management Transactions
This is the fourth Standard issued by FMSB and FMSB member firms provide and publicise Statements of Commitment in relation to all published Standards.
Andy Donald / Rebecca Mitchell
+44 207 379 5151
Notes to Editors
1) The Fixed Income, Currency and Commodities (“FICC”) Markets Standards Board (“FMSB”) is an independent body set up by market practitioners 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 is at the heart of the FMSB’s mission.
2) Setting up the FMSB was one of the main recommendations to emerge from the Fair and Effective Markets Review (“FEMR”), which was conducted by HM Treasury, the Bank of England and the Financial Conduct Authority.
3) The FMSB has a 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 sub-committees addressing Market Practices, Codes & Standards Convergence and Conduct & Ethics. The Market Practices sub-committees are split into 4 asset-class specific committees. There is also an Advisory Council representing the interests of member firms.
4) The FMSB’s members bring together sell-side investment banks, buyside asset managers, market infrastructure providers and exchanges, custodians and users of the market such as corporates. This constitution is unique. The members firms are:
Bank of America Merrill Lynch
Bank of New York Mellon
Citigroup Global Markets Limited
Crédit Agricole CIB
Legal & General IM
Linklaters (Legal Advisor)
Lloyds Banking Group
London Stock Exchange Group
National Australia Bank
NEX Group PLC
Royal Bank of Canada
Royal Dutch Shell
Royal Mail Group
Standard Life Aberdeen