UK FICC Markets Standards Board Announces Consultation on Draft Statement of Good Practice
06/20/2019The U.K. FICC Markets Standards Board has published a Transparency Draft of its new Statement of Good Practice on Conflicts of Interest. The Statement aims to provide guidance for participants in the fixed income, currencies and commodities markets on ways to identify and manage risks arising from conflicts of interest in the FICC markets. The guidance is particularly targeted at firms operating in Europe and the conflicts that may arise from the sale and trading of publicly listed or over-the-counter securities or financial instruments. The Statement sets out eight key areas on which firms should focus to avoid conflicts of interest, which are:
- Identifying conflicts of interest (which may be between the firm and a client, between clients, or between the firm's employees and the firm and/or a client);
- Establishing measures that can be taken to prevent or manage and mitigate conflicts of interest;
- Establishing a system for internal escalation of conflicts of interest where appropriate so that conflicts may be dealt with appropriately;
- Establishing and maintaining controls for conflicts of interest to ensure they are identified, prevented or appropriately managed;
- Keeping appropriate records of identified conflicts;
- Appointing senior management to oversee the prevention and/or management and mitigation of conflicts of interest and to establish appropriate governance measures;
- Developing and maintaining a written conflicts of interest policy; and
- Providing a training program for all relevant employees on the firm's policies and procedures in connection with conflicts of interest.
FMSB members and other interested parties are invited to provide comments on the draft Statement. The consultation will run until September 6, 2019 and the final Statement will be published shortly afterwards.
The FMSB was established in 2015 following the U.K.'s Fair and Effective Markets Review and has developed standards to improve conduct in the FICC markets. The Statements of Good Practice are not part of the FMSB Standards and are not binding on FMSB members, but reflect the FMSB’s view of what constitutes good or best practice in the areas covered.
View the FMSB's Statement of Good Practice on Conflicts of Interest.
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