Bank of England NIPS Code updated

The Bank of England issued a new edition of The Non-Investment Products Code dated April 2009.

The Code, available at http://www.bankofengland.co.uk/markets/forex/fxjsc/nipscode.pdf, sets out good practice applicable to wholesale market dealings in non-investment products, namely:

• sterling wholesale deposits
• foreign currency wholesale deposits
• gold and silver bullion wholesale deposits
• spot and forward foreign exchange
• spot and forward gold and silver bullion.

The products covered by the NIPs Code are not covered by the Financial Services Authority Handbook which deals with investment products.

The Code applies to all brokers and principals in these markets, including not only regulated firms but also, as principals, companies, local authorities and other public bodies trading in the wholsesale markets. The Association of Corporate Treasurers, British Bankers’ Association, Building Societies Association, Chartered Institute of Public Finance and Accountancy, London Bullion Market Association, London Investment Banking Association and the Wholesale Market Brokers’ Association all endorse the Code and commend it to their members.

The Code is developed by market practitioners and co-ordinated through the Foreign Exchange Joint Standing Committee, the Sterling Money Markets Liaison Group (on both of which the ACT is represented) and the Management Committee of the London Bullion Market Association.

What’s new?

This updated Code adds a paragraph on FX settlement risk, updates the references to the FSA handbook and makes a minor amendment to the gold section.