The Bank of England, in collaboration with UK Finance, HM Treasury, and the Financial Conduct Authority, has successfully completed its latest UK-wide simulation exercise, SIMEX 24. The initiative aimed to test the UK financial sector’s ability to respond to a large-scale infrastructure failure requiring a complete shutdown and restart of the industry.

Developed by the Cross Market Operational Resilience Group (CMORG)—a strategic partnership established in 2015 by the Bank of England—the simulation is part of an ongoing programme focused on enhancing the sector’s operational resilience against the most challenging risks, including those identified in the UK Government’s National Risk Register.

The exercise strengthens the sector’s collective response to disruptive events, ensuring that firms and financial authorities can act swiftly to protect the UK’s financial system and its customers. This is crucial in maintaining a stable and reliable financial environment.

Sam Woods, Deputy Governor of Prudential Regulation and CEO of the Prudential Regulation Authority, emphasized the importance of preparing for a wide range of risks: “SIMEX provides unique opportunities for the banking sector and authorities to practice defending services essential to the economy.”

David Postings, CEO of UK Finance, added: “A resilient financial sector is critical to the UK economy. The sector-wide exercise ensures that we can respond effectively to incidents and safeguard the financial system.”

CMORG plays a pivotal role in identifying systemic risks, developing sector-wide mitigation strategies, and facilitating knowledge sharing. Its Sector Response Framework (SRF), tested during SIMEX, ensures the financial sector is prepared for coordinated responses to severe disruptions.

The International Capital Market Association (ICMA) has published the ‘Hong Kong Code of Conduct for ESG Ratings and Data Products Providers’.

This follows a public consultation that was held earlier this year, gathering feedback from market participants.

The Hong Kong Securities and Futures Commission (SFC) appointed ICMA to convene an industry working group and develop a voluntary code of conduct for the Hong Kong market in October 2023.

In line with recommendations by the International Organization of Securities Commissions (IOSCO), the code focuses on promoting transparency, good governance, management of conflicts of interest, and strengthening systems and controls in the sector.

Bryan Pascoe, chief executive of ICMA, says: “We are honoured to coordinate the voluntary code of conduct for Hong Kong, and we are grateful for the support of the Hong Kong SFC and the involvement of key stakeholders from the private and public sectors.

“We will continue to contribute to best practices in the market, as well as Hong Kong’s wider sustainable finance initiatives”

Julia Leung, CEO of the SFC, adds: “We congratulate the working group and ICMA for the successful finalisation of the [code] that will establish a benchmark for the provision of high quality, reliable, and transparent ESG information to combat greenwashing in Hong Kong’s growing green and sustainable finance ecosystem.”

The European Securities and Markets Authority (ESMA), the European Commission, and the European Central Bank (ECB) have announced the next steps to support the EU’s preparations towards a transition to T+1.

The three regulatory bodies have agreed to establish a governance structure, incorporating the EU financial industry, to oversee and support the technical preparations for the future move to a shorter settlement cycle.

In a joint statement, the authorities say that shortening the settlement cycle in the EU will change how markets function, but it also brings “important benefits” for the EU Savings and Investment Union (SIU).

The trend of shortening settlement cycles received a “significant boost” in May, the institutions say, when the US, Canada, Mexico, Jamaica, and Argentina completed their transition to T+1.

Following that, the UK committed to the implementation of T+1 by 2027.

“It is urgent to act if the EU wants to avoid prolonging and amplifying the negative impacts of the misalignment with major jurisdictions internationally,” the statement continues. “Given the high level of interconnectedness between the EU capital markets and those in other jurisdictions in Europe, a coordinated approach across Europe is desirable, with efforts to reach a consensus on the timing of any move to T+1.”

Although settling securities transactions on T+1 in EU Central Securities Depositories (CSDs) is already technically and legally possible, according to the authorities, amending the CSDR to mandate a harmonised shortening of the settlement cycle in the EU would ensure a coordinated and smooth transition to T+1 and provide legal certainty.

ESMA will deliver its final report on shortening the cycle to the European Council and the European Parliament in the coming weeks.

DTCC has announced the DTCC Digital Launchpad, an industry sandbox intended to bring together financial market participants and clear the path to scalable adoption of digital assets.

The Launchpad will feature market participants, technology providers, and others working together to identify and collaborate on meaningful pilots that have a clear path to production, notes the firm.

It will also provide DLT infrastructure that features capabilities from the DTCC Digital Assets product suite. These capabilities aim to help firms address some of the industry’s biggest challenges around data, liquidity, and infrastructure, including interoperability and data harmonisation.

Frank La Salla, DTCC president, CEO and director, comments: “DTCC Digital Launchpad will unify stakeholders from nearly every corner of the financial markets to solve the challenges facing adoption of digital asset technology.”

Nadine Chakar, global head of DTCC Digital Assets, says: “We’ve reached a critical inflection point in the adoption of digital asset technology, and DTCC is challenging the industry to rethink and reframe its siloed approach.

“The ultimate objective of DTCC Digital Launchpad is to bring the industry together to build production-ready, secure, and efficient digital market infrastructure and standards that will transform capital markets for generations to come.”