Minutes of the UK Money Markets Code Sub-Committee – November 2024

Minutes

Item 1: Introduction & Minutes of last meeting

The Co-Chair welcomed Committee members to this hybrid meeting and confirmed that the minutes of the last UK Money Market Code Sub-Committee meeting (held on 24 July 2024) have been published on the Bank’s website.

Item 2: CREST Transformation

A representative from Euroclear provided an update to the Committee on the Crest Transformation project which is aimed at modernising Crest’s infrastructure. A core part of the project is moving from Euroclear’s DBV product to Tri-party (EUI-Triparty) and the establishment of a Collateral Management System (CMS) which will conduct the auto selecting of collateral rather than DBV. This is a multi-year project which is expected to go live in 2028.

Given the importance of this project to the market, Euroclear have started engaging with market participants via a DBV to Triparty Working Group which held its first meeting in October 2024 and was well attended. Euroclear plans is to reconvene this group in Q1 2025.

Euroclear also plans to keep the Committee abreast of developments in this important project.

Item 3: T+1 and accelerated settlement

HMT’s taskforce on T+1 and Accelerated Settlement will be publishing a Code of Conduct in January 2025. This Code of Conduct is expected to outline a set of measures market participants and regulators should implement to achieve a successful transition to T+1 settlement in the UK.

The Committee was in favour of considering how it could help support awareness of this Code of Conduct, subject to a review of the Code of Conduct against the UK Money Market Code (the Code) to ensure that there are no conflicts.

It was suggested that this agenda item be retained as a standing item for future Committee meetings and that for the next meeting, a member of HMT’s taskforce be invited to ‘walk’ the Committee through the key points of the Code of Conduct and some of the frictions that may remain.

The Committee also suggested that there could be a role for the International Securities Lending Association (ISLA) to promote the Code of Conduct. Specifically, whether the Code of Conduct could be incorporated into ISLA’s best practice, which is not attested to by market participants but is recognised as market best practice.

It was noted that the Committee will likely consider whether to include the principles set out in the T+1 and Accelerated Settlement Code of Conduct during the next review of the Money Market Code in June 2027.

The implementation date for T+1 and Accelerated settlement is set for October 2027.

Item 4: Attestation Update

The Committee was informed that 230 market participants have to date signed the Statement of Commitment to the Principles of the Code, eight of which attested after the Code was updated in June 2024.

The Committee asked the secretariat to produce further analysis of the data.

This agenda item was introduced and proposed as a standing item to keep the Committee updated on the number of firms attesting to the Code but also to help better understand where and how the Code can be promoted.

A short summary of the Code has been drafted and will be used to further raise awareness.

Item 5: Diversity and Inclusion (D&I)

The Committee was informed that the FCA had published guidance regarding non-financial misconduct. This guidance indicated responsibilities for Trade Associations to raise awareness and play a role in reducing non-financial misconduct. It was agreed that, as a next step, it makes sense for relevant Trade Associations to connect directly to understand implications and scope, with a view to developing market best practice, which is proportionate, practical, achievable and reasonable for Trade Associations. The outcome of these discussions should then be taken forward for further discussion in this Committee and with FCA.

Also mentioned was the ongoing work being done by ISLA around the ISLA Connect brand which is aimed at building a steady pipeline of talent in the industry.

ISLA Connect is an inclusion initiative. ISLA Connect hold various events with an educational element which are aimed at those at the beginning of their careers and those who have changed careers or roles. ISLA Connects empowers people through education and creates structured networking to allow people to build networks where they may not normally have had the opportunity to do so.

Item 6: AOB

None.

Committee attendees

Attendees (in-person)

Alessandro Cozzani – BofA
Andrew Welch – LGIM
Christopher Mundy - Euroclear
Helen Willingale – Blackrock
James McKerrow - Insight Investment
Ned Taylor – HSBC
Ian Mair - LMMA
Philip Chilvers - TP ICAP

Attendees (Virtual)

Antony Baldwin – LCH
Gordon Lowson - Aberdeen Standard Investments
Ina Budh-Raja (Co-Chair) - BNY Mellon
Nic Erevik (Co-Chair) - Newcastle Building Society
Veronica Iommi - IMMFA

Bank of England

Simon Dolan
Tom Archer
Kpakpo Brown

Apologies

Andy Dyson - International Securities Lending Association (ISLA)
James Winterton - Association of Corporate Treasurers (ACT)
John Edwards - CME Group