UK Financial Markets Standards Board updated final statement of good practice for front office supervision of wholesale traded markets

The Financial Markets Standards Board has published its updated final statement of good practice for front office supervision of wholesale traded markets. The statement of good practice sets out 15 good practice statements, grouped under five themes, to support firms with their approach to supervision of market and client-facing activities. The statement of good practice represents an update to FMSB's original 2017 publication on front office supervision and includes new guidance to help firms meet challenges to supervision that have emerged since then amid evolving regulation, new working practices, and technological change.

Significant updates include good practice guidance around:

• Establishing clearer support for the role of a supervision framework.
• Clarifying the concepts of supervision, responsibility and controls.
• Specifying the roles and responsibilities of a supervisor and the standards expected.
• Providing clarity around reasonable spans of supervision.
• Addressing conflicts of interest including those that may arise from delegation.
• Measuring the effectiveness of supervisors in their role.
• Assessing the quality and context of the information provided to supervisors.
• Assessing supervisory data and related responsibilities for quality and proportionate controls.

The FMSB states that while this statement of good practice is focused on sell-side banks, it may also help to inform supervision activity across asset management firms, custodians, corporate trading functions, infrastructure providers, and treasury.

[View source.]