Bank of England Confirms its Commitment to Wholesale Market Conduct Codes

The Bank of England has published statements of commitment to the FX Global Code, the UK Money Markets Code and the Global Precious Metal Code. By issuing the statements, the BoE is demonstrating that it will abide by the principles of the three market codes, both when acting as a market participant and also when its activities include acting as agent for HM Treasury in managing the UK's official reserves in the Exchange Equalisation Account. HM Treasury has separately confirmed that it is content with the BoE's ability to adhere to the codes. Six other central banks in the European System of Central Banks have also simultaneously issued their own statements of commitment to the Global FX Code and it is expected all ESCB banks will have done so by May 2018.

The three voluntary market codes have been developed after the Fair and Effective Markets Review identified a need to make the Fixed Income, Currency and Commodities (FICC) markets more robust, fair and transparent and to ensure that they are underpinned by high ethical standards.  The FEMR was launched jointly by the BoE, HM Treasury and the Financial Conduct Authority in 2014 to undertake a comprehensive review of the FICC markets, following a global spate of serious misconduct in these markets in recent years. Market codes are one of a number of outputs from the FEMR review.

The FX Global Code was published in May 2017. FX Global Code supersedes and substantively updates existing guidance for participants in FX markets previously provided by the Non-investment Products (NIPs) Code. The code comprises a set of global principles of good practice for the foreign exchange market. It covers a broad range of areas, including ethics, governance, execution, information-sharing, risk management and compliance. It also covers trade confirmation and settlement. The FX Global Code is maintained by the Global Foreign Exchange Committee.

The UK Money Markets Code was published in April 2017 and sets out standards and best practice expected from participants in the deposit, repo and securities lending markets. The code incorporates revised relevant sections of the NIPs Code and also a revision and update of the Gilt Repo Code and Securities Borrowing and Lending Code. It will be updated as necessary as markets evolve by a dedicated subcommittee of the BoE's Money Markets Committee.

The Global Precious Metals Code was published in May 2017 by the London Bullion Market Association and replaces the bullion annex of the NIPs Code. Precious metals for the purposes of the code are gold, silver and platinum.

View the BoE press release.

View the HM Treasury press release.

View the FX Global Code.

View the UK Money Markets Code.

View the Global Precious Metals Code.