Minutes of the UK Money Markets Code Sub-Committee – May 2023

Minutes

Item 1. Introduction

The Co-Chair welcomed everyone to this hybrid meeting of the UK Money Market Code Sub-Committee (the Committee).

Item 2. Minutes of last meeting

The Co-Chair noted that the minutes of the last meeting had been published on the Bank’s website.

Item 3. Full Review of the Code

The Committee agreed that the UK Money Market Code (the Code) should be reviewed in accordance with the Terms of Reference. The Code was last updated in April 2021 and the Terms of Reference for the Code states that “a full review of the Code will be delivered approximately every three years”.

The Committee also agreed that this upcoming review should be conducted using a similar approach to the last time when the four chapters of the Code were divided amongst 4 Working Groups made up of members of the Committee. Some issues possibly worth considering for the update were: market standards around unexpected Bank Holidays, non-standard Crest closure, ESG issues and Floating Rate CDs. The Committee also noted that this review offers an opportunity to streamline and simplify the Code. One member of the Committee asked if the secretariat of the Committee could send a summary note which sets out all the money market initiatives, such as RTGS and CBDC, on the horizon to members ahead of the review to ensure that all members start the review on the same page. The secretariat agreed.

The Committee also discussed and agreed to inviting members of other external participants such as trade associations and corporates to join the review process. To date corporates have not seen signing up to the Code as a priority. It was therefore felt that corporates being involved in the review could provide a good subsequent incentive to commit to the Code.

The Committee agreed to start the review in September 2023.

Item 4: Review of the Terms of Reference

Committee members provided comments on a number of suggested amendments to the Terms of Reference (ToR) of the UK Money Market Code Sub-Committee as part of a review conducted by the secretariat. The ToR is also up for review and thus provides an opportunity to align it with the ToRs of the UK Money Market and Securities Lending Committees.

The secretariat noted the comments from members and agreed to take them away for consideration.

There was a short discussion on whether the term ‘Securities Lending’ (a narrow definition of the activities which fall under this area) should be used in the ToR or be replaced with ‘Securities Financing’ which some Committee members argued was a much broader and up to date definition, although this does for many incorporate repo markets which are covered in a separate chapter in the Code.

There was a question about whether firms moving their head offices out of the UK because of Brexit were still required to sign the Code. It was noted that the Code covers any transaction where one of the parties to the transaction is a UK market participant.

Item 5. Promoting the wider adoption of the Code

Feedback on the Statement of Commitment letters sent to the signatories of the UK Money Market Code

The Committee was informed that thirty to forty out of 210 firms had responded to the Statement of Commitment letters sent to signatories of the UK Money Market Code earlier in the year. Responses continue to come in. There was a short discussion about whether the Committee should be more prescriptive with regards to who in a firm should attest to the code. The consensus was that this should be left to the firm to decide. The Committee was also informed that there had not been any other feedback to the letter including on the potential breach of the code mentioned in the letter.

Item 6. Diversity and Inclusion (D&I)

A few thoughts on how D&I could be improved were shared with the Committee. Some of the initiatives offered were: (i) changing internal behaviours through training; (ii) ensuring (particularly for the organisations that organise conferences) that there is enough diversity on speaker panels. A member noted that close to half of the speakers on the panel, in a recently organised conference by their firm, were women. The same member also shared another initiative aimed at getting junior staff of its member firms to attend conferences. This involved charging half price for staff of firms who had not attended a conference before. Although take-up has not been as strong as expected, it was suggested that seniors need to be brave and send a diverse set of people to conferences. It was noted that these initiatives chimed with the Bank’s MVP initiatives.

One of the reasons, put forward by a Committee member, why it has been difficult to increase diversity within sterling money markets is the lack of interest in money markets by the new generation of talent. A potential solution to this issue, it was argued, is to intentionally increase the level of market education new generation, to build their understanding of industry and showcase the money markets as an optimal career starting point to learn the fundamentals of the markets.

Item 7. AOB

No AOB.

Committee attendees

Attendees (in-person)

Attendees (Virtual)

Apologies

Bank of England