30 Jun 2015

HFSB welcomes the launch of FICC Market Standards Board (FMSB)

The Fixed Income, Commodity and Currency (FICC) markets have come under intense regulatory scrutiny following the benchmark-rigging scandals involving major banks (and subsequent fines running into billions). As part of the Bank of England Fair and Effective Markets Review, leading global FICC market participants announced the creation of the FICC Markets Standards Board (FMSB) to complement regulatory efforts and drive better practices in this area.

The HFSB was invited to participate in the FMSB steering committee, led by Elizabeth Corley, CEO of Allianz Global Investors. Allianz is a long-time Signatory and a Core Supporter of the HFSB.

During a high- level regulatory panel discussion at the IOSCO Conference, involving senior UK and US regulators, academics and industry representatives, Elizabeth Corley recognised the pioneering role of the HFSB in the area of standard-setting,. She noted: "the HFSB approach of bringing users (investors) and providers (managers) together served as a blueprint for developing the FMSB framework". The panellists at the IOSCO event expressed their concerns about excessively granular regulation driving 'robotic' compliance, without necessarily improving behaviours and outcomes.

The HFSB welcomes this opportunity to contribute to the debate on creating more successful regulatory systems, which drive better outcomes and help build a better industry 'culture'.

During his Mansion House Speech on 10th June 2015, Mark Carney, Governor of the Bank of England, made the following comments in regard to the new FMSB which clearly resonate with what the HFSB does and stands for: “I welcome the industry’s leadership in drawing up plans for a new FICC Markets Standards Board. The Board’s mandate will be to establish readily understandable standards, keep them up-to-date with market developments, and promote adherence to them. Crucially, the Board will be dynamic, and will monitor and address areas of uncertainty in specific trading practices. We need global standards for global markets. I welcome the FICC Markets Standards Board’s intent to be as global as possible in its membership and influence.”