On 15 September 2017, the FICC Markets Standard Board (FMSB) published two new sets of Statements of Good Practice for Fixed Income Currencies and Commodities (FICC) market participants. The new standards identify good practice that firms should consider in the areas of (1) front office supervision, and (2) monitoring of electronic communications. The FMSB encourages firms to review their existing practices in light of the new standards and consider appropriate changes in light of the nature and scale of the individual firm.

The Statement of Good Practice regarding front office supervision covers areas including the clear definition of business activities requiring supervision, arrangements for delegation and the experience and competence of supervisors. Good practice is also identified for how firms can operate a defined control framework to demonstrate the maintenance of complete supervisory coverage of all relevant employees and activities over time. This requires clarity of supervisory hierarchies, in particular where global processes or remote locations are subject to supervision.

The new standard for the monitoring of electronic communication outlines good practice for the surveillance of written electronic communications on firm-owned devices, and “bring your own devices” (e.g. desktops, laptop computers, mobile phones) when using applications and software approved by the firm for the conduct of business activity on such devices. Personal communications which occur on firm devices may fall into the scope of monitoring by virtue of the communication channel. Written electronic communications conducted on personal devices for personal purposes and not conducted using applications and software approved by the firm for the conduct of business activity on such devices (e.g. personal email accounts, personal social media accounts, texting on own mobile devices etc.) are not within the scope of the published document.

The standards are highly relevant to firms in light of a raft of related requirements coming down the line in the next 18 months. If members have any questions, please contact Adam Jacobs-Dean, Oliver Robinson or Adele Rentsch.