Minutes of UK Money Markets Committee meeting – October 2022


Item 1 – Presentation on the ELAC Online Portal

The ACI Financial Market Association gave a presentation to the Committee on their ELAC online portal. The ELAC online portal is seven years old and has assess to three codes: the FX Global Code, Global Precious Market Code and the UK Money Market Code. The presentation focused on how the ELAC Portal gives market participants the framework to demonstrate and communicate that all staff are up-to-date with the latest codes, global standards and best practice guidelines applicable to their industry and role.

Item 2. Introduction

The Co-Chairs welcomed everyone to the virtual meeting of the UK Money Market Code sub-Committee.

Item 3. Minutes of last meeting

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

Item 4. Failed Trades

Repo Fails

It was noted that there had been an increase in settlement efficiencies (97%) in the period between May and early September. Over the last two weeks of September and early October, there had been a significant increase in gilt repo volumes and the increase in the level of fails was commensurate with the increased volumes. Since the date of the last meeting Euroclear have made some changes to support the market and these include a permanent extension to the CREST diary, extending the DVP settlement window. Furthermore, auto splitting is to go live on 21 November 2022. There have been no further issues with the CREST system.

Securities lending fails

Results from an informal monthly survey (covering the period 2019 to the present) of some of the big institutions with regards to ‘fails’ for securities lending transactions were highlighted. This indicated a high level of settlement rates for open leg trades, settlement rates of between 95% and 97%. On the other hand, the settlement rates for closing leg trades are quite poor, generally in the 85% range for both equities and fixed income. The introduction of the Central Securities Depositories Regulation (CSDR) has led to an improvement, to 90%, in settlement rates for return leg trades in equities. Settlement rates for fixed income, on the other hand, have been falling steadily this year and are currently at 79% (based on aggregated figures for government and corporate bonds). The biggest reason for return leg fails is due to brokers not having the stock available to return (in equities space) and in fixed income due to illiquidity in the corporate bonds market. Data obtained from the ECB website showed settlement rates for TARGET2- Securities (T2S) over the period January to June 2022, both in value and volume, of around 93%-95%. The Committee agreed to monitor settlement rates and also noted that it is open to setting up a small working group to investigate the issue further. It was generally agreed that such poor settlement discipline was not acceptable.

Item 5: Diversity and Inclusion (D&I).


The Committee was given an overview of the work that ISLA is doing in the area of diversity and inclusion, noting that at the moment the Association’s D&I activities have focused on working with partnership associations, such as the work being done with Women in Finance Group. ISLA is looking to step up its activities in the area of diversity and inclusion and is thus looking into broadening its approach to D&I and evaluating engagement with relevant groups. It was also noted that ISLA is at the early stage of this broader D&I strategy which will be driven by the Board and by members and so there will be more to report back at a future meeting.

Impact of the return to office

It was suggested that it was very early, given that various working from home models are in flux and also due to lack of data, to assess the impact of working from home on D&I. Data on gender metrics over a 5 year period showed slower than expected change in D&I which could be due to the pandemic. Perhaps a more intentional approach which provides support, sponsorship and advocates for more diverse candidates to move through the pipeline into middle and senior levels, where numbers are significantly dropping off, is required. There will be further work by external bodies to develop data to unearth some of the issues in this area. It was noted that it will be difficult to achieve change without data and targets.

It was suggested that perhaps the Committee should commission a working group to examine D&I in Money Markets and come up with recommendations to help drive change in Money Markets and to ensure momentum was maintained. It was also noted that the 2022 Mckinsey report on ‘Women in the workplace’ highlights the recent increase in attrition rate for women in middle and senior levels.

Item 6. Agreeing the text of the Statement of Commitment Letter

In light of a recent breach of the Money Market Code, continuing fails in the money market, and the need to maintain momentum on Diversity & Inclusion amongst market participants’ trading teams, the Committee agreed at the meeting in May 2022 to send a letter to all signatories of the Code to remind them of their obligations. The Co-Chairs and the Bank now wished to ensure that there was full agreement to the suggested text of the letter. One Committee member suggested splitting paragraph 3 (which covers diversity and inclusion and working from home), into two distinct paragraphs. Another Committee member suggested further drafting changes which would be shared with the Secretariat of the Committee. When the letter is finalised it would be sent out to signatories of the Money Market Code.

Item 7. AOB


Committee attendees

Attendees (Virtual)

Kim Winding Larsen (President), invited to give a presentation on ELAC Online Portal – ACI FMA
Rui Correia (Executive Director and Chair of the Board of Education), invited to give a presentation on ELAC Online Portal – ACI FMA
Gordon Lowson – Aberdeen Standard Investments
James Winterton – Association of Corporate Treasurers
Tim McLeod – Blackrock
Ina Budh-Raja (Co-Chair) – BNY Mellon
John Edwards – CME Group
Louis Sinclair – DMO (Observer)
Chris Mundy (invited to give a presentation on Repo fails) – Euroclear
Jan Grauls – Euroclear
Vicky Worsfold – Guildford Borough Council
Andy Green – Hoare & Co / LMMA
Glenn Handley (Co-Chair) – HSBC
James McKerrow – Insight Investment
Veronica Iommi – IMMFA
Julie Joe – IMMFA
Andy Dyson – ISLA
Tina Baker – invited to give a presentation D&I at ISLA – ISLA
Mike Jones – LCH
Bola Tobun – London Borough of Enfield
Terry Barton – Nationwide
Nic Erevik – Newcastle Building Society

Bank of England

Jon Pyzer
David Glanville
Kpakpo Brown


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