On 14 October 2019, the FICC Markets Standards Board published a final statement of good practice on conflicts of interest. The main purpose of the statement is to provide fixed income currencies and commodities (FICC) market participants with guidance as they consider ways in which to identify, manage or mitigate conflicts of interest that arise both: (i) specifically in connection with their FICC markets business; and (ii) more generally across their firm.
The means of preventing, managing or mitigating conflicts of interest that are suggested in the statement of good practice include periodic reviews within each business area to identify scenarios or situations that could potentially create a conflict, as well as ensuring the appropriate identification and escalation procedures for actual conflicts.
There are eight specific good practice statements that firms should look to when considering their own working practice, including:
- ensuring the necessary policies, procedures and training are in place across a firm;
- having senior management provide oversight and governance around how conflicts of interest are identified and managed; and
- establishing controls to prevent conflicts of interest from arising, as well as managing or mitigating those that do arise.