FMSB Spotlight Review Looks at Hybrid Working
Posted by Colin Lambert. Last updated: October 1, 2021
The FICC Markets Standards Board (FMSB) has published its latest Spotlight Review, examining hybrid working in FICC markets.
FMSB says the flexible working practices that have emerged following the onset of the COVID-19 pandemic have given rise to a number of benefits for market participants and that there is a desire to harness some of these benefits to allow some flexibility for front office practitioners to carry out their activities from non-office locations longer term. It adds the extent of this flexibility will vary by firm and role.
The Spotlight Review seeks to support the adoption of hybrid working models in FICC markets in a controlled way by identifying key conduct risks associated with such models and considering steps that firms can take to mitigate them. Regulators have been clear that regulatory obligations have not changed as a result of the shift to hybrid working so the review outlines steps that firms can take to promote equivalent conduct outcomes in a hybrid environment.
Conduct-related risks associated with hybrid working models break down into five thematic categories FMSB says; cultural change; supervision and control impairments; execution risks; sharing of confidential information; and threats to market effectiveness.
Within these five themes are a total of 43 specific risks, including risk of sub-cultures developing, reduced engagement with training, slower resolution of operating incidents, inappropriate communication channels, loss of connectivity and controlling the flow of confidential information. Potential mitigants are considered in relation to each risk.
“Hybrid working models have the potential to drive a number of benefits for firms, individuals and the market more widely, including attracting a more diverse pool of people to FICC markets and improving staff wellbeing,” says Myles McGuinness, CEO of FMSB. “We hope that this Spotlight Review supports firms in considering and addressing elevated risks associated with the adoption of hybrid working models.”
The full review can be found here.