Money Markets Code Seminar

Transcription

1 19 June 2017 Money Markets Code Seminar Chris Cummings, CEO, The Investment Association 1

2 Chatham House Rule The convention which entitles attendees to use the information from the meeting strictly on the understanding that the identity and affiliation of speakers and of any organisations the speakers refer to are not disclosed outside of the meeting unless such information is already in the public domain. Attendance is considered to be consent.

3 19 June 2017 Buyside Panel Ross Barrett, Capital Markets Specialist, The Investment Association Gordon Lowson, Head of Money Markets and Foreign Exchange, Standard Life Jennifer Gillespie, Head of Money Markets, Legal & General Investment Management Mick Chadwick, Head of Securities Finance, Aviva Investors 3

4 The UK Money Markets Code Mark Thomasson Head of Short Term Markets, RBS Treasury Monday 19 June 2017 Information Classification: Public

5 The UK Money Markets Code Overriding Principle to always act in a manner to promote the integrity and effective functioning of the markets. The Code is intended to promote an open, fair, effective and transparent market. 5 Information Classification: Public

6 The UK Money Markets Code Policy Linkage Senior Managers Regime (SMR) Certification Regime Competition Law Conflicts of Interest KYC / AML Market Abuse Regime 6 Information Classification: Public

7 The UK Money Markets Code Application Embed Tone from the top Policy and playbook training Monitor Group Policy Learning (GPL) Modules Demonstrate Incorporate into our language 7 Information Classification: Public

8 The UK Money Markets Code Statement of Commitment Design for the future state 8 Information Classification: Public

9 UK MM CODE ADHERENCE 19 June 2017

10 APPROACH TO ADHERENCE Review of the Code against existing policy, procedure and control Determine how to comply with each principle and statement Document the procedures and controls to support compliance Update desk procedures, provide training and monitor controls Review Approach to comply Document Embed Leading Principle Intro text Additional detail Category Approach to comply Gap analysis Procedure Action Governance and Risk Market Participants 6.1 Senior management is ultimately responsible for establishing, embedding and monitoring the effectiveness of an Ethics n/a Group / FM policy Management should have an applicable governance framework that facilitates responsible participation in the UK appropriate, and where applicable local, governance framework for participation in the UK Markets. Governance and Risk Market Participants 6.2 The senior management of a UK Market Participant should embed and demonstrate a strong culture of ethical conduct and Ethics n/a Group / FM policy Management should have an applicable governance framework that facilitates responsible participation in the UK Markets and provides standards within the firm. Annual Certification Mandatory Training Governance and Risk Management Governance and Risk Management Market Participants should have an applicable governance framework that facilitates responsible participation in the UK Markets and provides for comprehensive oversight of such activity at an appropriately senior level of management. Market Participants should have an applicable governance framework that facilitates responsible participation in the UK Markets and provides 6.3 The body that has overall responsibility for a UK Market Participant should enable appropriate local management, if different, to devote sufficient time and attention to provide for: - effective management - appropriate skills and experience - independent challenge - a framework for accountability and reporting in its UK Market activities. 6.4 Primary responsibility rests with senior management in setting this tone from the top as a strong and sustained priority. A UK Market Participant s business or, as appropriate, treasury model should positively promote good conduct and the business or treasury strategy should not conflict with this aim. In practice, senior management should apply standards so that: i. the embedding of best practice, values, conduct and behaviours receives regular and appropriate review and oversight; ii. there is sufficient challenge posed to the appropriate senior management team on market best practice, values and behaviours; and iii. they are highly visible in demonstrating and championing the positive benefits of embedding the desired practices, values and Ethics n/a Group / FM policy Annual Certification Mandatory Training Ethics n/a Group / FM policy Annual Certification Mandatory Training 10

11 EMBED Update procedures Training Controls Communication Supervision Monitoring Surveillance Metrics Adherence statement Client notification 11

12 Conduct The risks arising from misconduct is one of the largest contingent risks on a firm s balance sheet. It rarely matures, can t be sold or hedged using normal market instruments. Any other risk this large, with these characteristics, would be managed and mitigated to within an inch of its life. Yet stick the word conduct in front of it and suddenly it is not. Tracey McDermott, Acting Chief Executive at the Financial Conduct Authority. July

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