FMSB Sets Out 2026 Workplan

The Financial Markets Standards Board has published its workplan for 2026, including continued work on pre-hedging and market applications of AI, as well as more general work aimed at processes and behaviour.

The programme is allocated across FMSB’s five Committees, as well as its newly-established buy-side forum. The workplan covers issues that may be conduct-related or operational in nature where these have the potential to affect market fairness or effectiveness.

The topics are intended to address one or more of the following thematic areas, in line with FMSB’s remit. These include reducing uncertainty and ambiguity in prevailing market practices; bridging gaps between regulation and evolving market practices or structures; identifying and responding to emerging market threats or trends; and strengthening and promoting the convergence of international market standards.

The pre-hedging work will be a continuation of that already carried out by the working group, however, FMSB says it will now focus on industry guidance and disclosure in the wake of IOSCO’s final report on the subject.

Another potential focus is the provision of behavioural guidance for third-party dealers called upon to provide a valuation at a specific point in time, typically as a fallback, where market data or bilateral agreement is impossible. “In practice, dealers are often reluctant to respond to such requests due to the absence of financial incentives and concerns relating to conduct, litigation and benchmark-related risks,” FMSB’s workplan states. “This can limit the effectiveness and reliability of market quotations as a valuation tool. FMSB is exploring whether behavioural guidance on responding to such requests could help support more consistent and constructive market practices.”

On AI, the focus of the working group is on market-facing applications in wholesale markets, distinguishing between more traditional and novel use cases, the potential risks these pose to firms, clients and markets as well as how firms may think about mitigating such risks.

FMSB says market-facing AI use cases are typically embedded within models and algo trading systems which are already governed by strict control frameworks, but adds there will be a potential update to the model risk management Statement of Good Practice to reflect changes in the control environments with respect to AI applications and ensure that existing and new risks are appropriately managed.

“FMSB is a unique organisation that brings the industry and other relevant stakeholders together to address both behavioural and operational market challenges in an effective, pragmatic way,” says Myles McGuinness, CEO of FMSB. “The wide range of work in progress, as well as those topics that have emerged from committees’ horizon scanning as potential areas of focus is a reflection of members’ strong engagement and support for FMSB as we enter our next decade.

“We look forward to drawing on the expertise of our members to address pertinent areas such as AI in trading, non-financial risk and misconduct and digital identity,” he adds. “Our newly established buy-side forum will also bring together the increasing number of FMSB members on the buy side to harness their insights.”