This Code sets out the standards and best practice expected from participants in the deposit, repo and securities lending markets in the UK. It supersedes guidance for participants in these markets provided by the NIPs Code, the Gilt Repo Code and the Securities Borrowing and Lending Code. By bringing these together it will more clearly establish the framework for transacting in UK money markets. The high standards which the Code promotes are intended to build greater trust and certainty throughout these markets, which would bring clear benefits for all involved.
This new Code remains voluntary but the Bank is encouraging all market participants to follow its guidance. A standardised Statement of Commitment to the Code is provided in Annex 1 and the Bank’s ambition is for the Code to be embedded widely by the beginning of 2018.
The Code’s overriding principle is for UK Market Participants to always act in a manner to promote the integrity and effective functioning of the markets. It sets out six underpinning principles in order to promote an open, fair and effective market. These are detailed in Chapter 1, Background and Key Principles, and in Chapter 3, Repo, the Code further sets out a summary of the basic procedures which participants in the repo market should observe as a matter of best practice (Chapter 2 relates to Unsecured Money Markets and Chapter 4 to Securities Lending).
This high level Code is different in nature from, but complementary to, the general recommendations laid out in the ICMA ERCC Guide to Best Practice in the European Repo Market, which provides the market with technical guidance that is widely utilised and which the ICMA ERCC will continue to periodically amend for the benefit of its members. ICMA, consistent with its general support for codes of conduct which can enhance the functioning of capital markets, encourages all UK Market Participants to follow the UK Money Markets Code’s guidance as applicable.
