Bank of England Money Markets Code Sub-Committee launches triennial code review and flags CREST outage contingency risk for gilt and repo settlement
The Bank of England's UK Money Markets Code Sub-Committee met on 8 September 2026, with minutes published on 6 October 2026, formally agreeing to begin a triennial review of the UK Money Market Code (a voluntary conduct code for participants in the UK unsecured deposits, funding, and securities lending and repo (repurchase agreement) markets). The review, due to produce an updated version of the Code in 2027, will follow a process described as "light touch but thorough", with an emphasis on material developments in UK money markets, clarifications, and futureproofing. The previous updated version of the Code was published in June 2024. Of particular note, the Committee flagged Euroclear UK & Ireland's work on contingency arrangements for a CREST outage. CREST is the UK's central securities depository, the electronic system through which most UK equities and gilts are settled. A so-called "mini-CREST" contingency arrangement could have implications for gilt and repo market (short-term borrowing using government bonds as collateral) settlement if the primary system were to fail. The Committee said it would monitor this development. Nine firms attested to the Code in 2026, with 234 firms having signed the Statement of Commitment since the Code launched in April 2017. Attendees at the September meeting included representatives from LCH, LGIM, ISLA, Insight Investment, HSBC, TP ICAP, BofA, the Debt Management Office (DMO), Lloyds Bank Corporate Markets, and Newcastle Building Society, among others.
Why this matters
The triennial review of the UK Money Market Code matters because the code shapes conduct standards across the UK's short-term wholesale funding markets, a plumbing layer of the financial system that is largely invisible until it fails. The CREST contingency item is the most operationally significant agenda point: gilt and repo market settlement underpins the functioning of the entire sovereign bond market, and any gap in contingency planning for a CREST outage would represent a systemic vulnerability at a time when gilt yields are already elevated and hedge fund leverage in the gilt market remains a concern for the Financial Policy Committee. The review's 2027 timeline means practitioners will have opportunities to engage during the consultation process.
On the Ground
This development activates banking and finance, financial regulation, and financial markets infrastructure practice groups. Law firms advising banks, broker-dealers, and asset managers active in the repo and securities lending markets will track the code review for any changes that affect their clients' operational procedures or documentation standards. The CREST contingency work may also generate advice on settlement risk, market disruption clauses in ISDA or GMRA (Global Master Repurchase Agreement) documentation, and operational resilience obligations. A trainee on a banking and finance matter touching money markets would assist with facility agreement schedule review, legal opinion coordination for cross-border repo transactions, and CP (conditions precedent) checklist management.
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