FMDQ Codified Rule Book Money Market

8/13/2019 FMDQ Codified Rule Book Money Market

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November 2013

Codified Rule Book for Money Market


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Table of Contents

Introduction ..................................................................................................................................................................................................................................... 4

Key Definitions ................................................................................................................................................................................................................................. 5

Codified Rule Book for Money Market ............................................................................................................................................................................................ 6

General Standards........................................................................................................................................................................................................................ 6

Powers Exercisable................................................................................................................................................................................................................... 6

Committees .............................................................................................................................................................................................................................. 6

Rule Interpretation .................................................................................................................................................................................................................. 6

Rule Applicability...................................................................................................................................................................................................................... 6

Rule Amendments .................................................................................................................................................................................................................... 6

Authorisations & Approvals for Membership .............................................................................................................................................................................. 7

Eligible Institutions ................................................................................................................................................................................................................... 7

Eligibility Criteria ...................................................................................................................................................................................................................... 7

Technical Requirements ........................................................................................................................................................................................................... 7

Organisation Requirements ..................................................................................................................................................................................................... 8

Termination of Membership (Suspension and Revocation of Licence) ................................................................................................................................... 9

Obligations & Rights ................................................................................................................................................................................................................... 10

Market Making ....................................................................................................................................................................................................................... 10


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Manipulative or other Fraudulent Devices ............................................................................................................................................................................ 10

Trading & Execution ................................................................................................................................................................................................................... 11

Types of Transactions ............................................................................................................................................................................................................ 11

Trading Hours ......................................................................................................................................................................................................................... 15

Trading Parameters ................................................................................................................................................................................................................ 15

Trading Halt ............................................................................................................................................................................................................................ 16

Other Trading Practices ......................................................................................................................................................................................................... 16

Clearing & Settlement ................................................................................................................................................................................................................ 17

Trade Reporting ..................................................................................................................................................................................................................... 17

Trade Confirmation ................................................................................................................................................................................................................ 17

Trade Settlement ................................................................................................................................................................................................................... 18

Dispute Resolution ..................................................................................................................................................................................................................... 19

Mediation ............................................................................................................................................................................................................................... 19

Arbitration .............................................................................................................................................................................................................................. 20

Reference ....................................................................................................................................................................................................................................... 25


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Introduction

In a bid to develop the Nigerian wholesale money market, it has become pertinent that a comprehensive code of conduct and operating rules be instituted to guidethe two-way quote market in trading money market instruments activities.

Adherence to these rules and tenets of professionalism by market participants is necessary to demonstrate a well-functioning market with minimal need foroversight by the Central Bank of Nigeria (CBN). These rules shall be binding on all trading members that are Money Market Dealers (MMDs).

FMDQ has adopted the existing Financial Markets Dealers Association (FMDA) rules which complement the provisions of the Central Bank of Nigerias 2007 MoneyMarket Dealership System in Nigeria: Operational Procedure. FMDQ intends to re-work some parts of these rules after its launch.

Each trading member is responsible for the activities of its personnel (both dealing and support staff). These rules are therefore addressed, not only to the

management of the trading members, but to the dealers and the relevant operational support staff. Management should clearly document the authorities and

responsibilities within which dealing and support staff should operate. These shall include:

General dealing policy including reporting procedures Persons authorised to deal Products to be dealt in

Risk management (counterparty, position and stop-loss limits etc.) and internal controls Confirmation and settlement procedures Relationships with member firms Other relevant guidelines as considered appropriateManagement should ensure that individual dealers are aware of their responsibility to act professionally at all times. It is the responsibility of management and staffto ensure that they are aware of legal requirements applicable to the transactions they undertake and to abide e with them.

These rules shall be read in conjunction with, and shall not be superior to any Laws and Enactments of the Federal Republic of Nigeria or any directive(s) of theCBN and other regulatory/ monetary authorities.

While steps have been taken to ensure that these rules are as comprehensive, these rules may not be exhaustive. It is our hope that both the letter and the spirit ofthe rules will be adhered to.


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Key DefinitionsAcronym Description

AMCON Asset Management Corporation of Nigeria

CBN The Central Bank of Nigeria

CSCS Central Securities Clearing System

DMB Deposit Money Bank

DH Discount House

FGN Federal Government of Nigeria

FBB Fixed-Buy-Back

FMDQ Financial Markets Dealers Quotations

IPHC Initial Pre-Hearing Conference

MMD Money Market Dealers

MVPS Market Value of Purchased Securities

MPC Monetary Policy Committee

MSA Mediation Submission Agreement

NMRA Nigerian Master Repo Agreement

OBB Open-Buy-Back

O/N Overnight

Repo Repurchase Agreement

RTGS Real Time Gross Settlement

SEC Securities and Exchange Commission

SDF Standing Deposit Facility

SLF Standing Lending Facility

TDC Treasury Dealership Certificate

TRF Term Repurchase Facility


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Codified Rule Book for Money Market

Rule SectionRule

Sub-SectionRuleCode

Rule Reference Detail

GeneralStandards

PowersExercisable

1111 Institutional Arrangements

i. Trading members shall be supervised by the CBN on all issuesrelating to primary dealership

ii. A trading member shall apply administrative and institutionalarrangements that allow for transparent and safe operations

iii. Appointment of a trading member shall be terminated by theCBN, upon the breach of any of the provisions of the guidelines

CBN GPD Sec. 5 (i-

iii)

Committees1121 i. FMDQs Executive Regulation & Supervision Committee and the

FMDQ Board Regulation & Supervision Committee shall rule ondisputes/infractions referred to it by trading member, customer orthe Market Surveillance Unit of FMDQ on matters relating to

dealing relationships, market standards and conduct of the tradingmembers

FMDQ

RuleInterpretation

1131 i. The operational procedure (Money Market Dealership System inNigeria April 24, 2007) should be read along with the CBNsGuidelines for Dealership in Money Market Instruments publishedin January 2007. The two documents are available on the CBN

website

CBN MMDS Sec.

1.3

RuleApplicability

1141 i. Following the appointment of Money Market Dealers (MMDs),the CBN operational guidelines stated above are required to guidethe money market activities

CBN MMDS Sec.

1.1

RuleAmendments

1151 i. FMDQ shall file with the Securities and Exchange Commission(SEC), three copies of a report of any proposed amendment orrepeal of or any addition to its rules within 30 days (or such shorterperiod as SEC may authorise) before any action is taken on such SEC SRR Sec.


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Rule SectionRule

Sub-SectionRuleCode


amendments, revocation or addition by its members or by anygoverning body thereof

192(1)

1152 ii.

FMDQ shall copy CBN on all proposed amendment or repeal oraddition to its rules FMDQ

Authorisations& ApprovalsforMembership

EligibleInstitutions

1211 i. All Deposit Money Banks (DMBs) that are appointed by CBN asMMDs

CBN CABD

EligibilityCriteria

1221 i. A trading member shall be either a bank or a Discount House(DH)

ii. A trading member is required to maintain a minimum capital baseof N3.00 billion and comply with the liquidity and other regulatory

requirements of the CBN

CBN

CBN

GPD Sec. 4 (i-

iii)

GCRC Sec. II

(4)

TechnicalRequirements

1241 i. A trading member shall abide by the guidelines, rules andregulations on primary dealership and any other requirements that

may be stipulated by the Central Bank of Nigeria from time to

time

ii. A trading member shall operate a current account with the CBNfor the purpose of dealing in money market instruments

iii. A trading member shall ensure that its account is properlymaintained at all times, and shall not be overdrawn for any reason

iv. A trading member shall be linked to the CBN on-line tradingsystem

v. A trading member shall have secure internet access and dedicatedtelephone lines for dealing with CBN

vi. A trading member shall have voice recording machines

CBN GPD Sec. 4 (i-

vi)


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Rule SectionRule

Sub-SectionRuleCode


OrganisationRequirements

1261 A trading member shall have Chief Dealer/Financial MarketsOfficer/Dealers whose sole/primary responsibilities shall include:

i. Monitoring market performanceii. Monitoring incoming electronic trade instructionsiii. Processing or executing trades either by telephone or onlineiv. Analysing research compiled by investment analysts to identify

market opportunities

v. Advising fund /investment managers and stockbrokers on significantchanges in market and recommending buy /sell actions

vi. Deciding on the products to buy and sell, using careful judgementand research to try and predict how the markets are likely to move

vii.Preparing reports to summarise trading activitiesviii.Ensuring details of any problems or delays in processing instructions

are reported to the relevant authorityix. Regularly monitoring global economic and political developments

that can affect prices

x. Constantly networking to maintain strong relationships with analysts,investment managers and brokers

xi. Compliance with legal requirements, industry regulations,organisational policies and professional code

CBN CFB AppendixC

1262 Required Certifications Skills and Competencies for Chief Dealer/Financial Markets Officer/Dealers:

i. Broad knowledge about securities market with detailed knowledgerelating to the specific area you are trading in

ii. Quick thinking and ability to perform under pressureiii. Accurate and excellent attention to detailiv. Swift reactions to changing market conditions

v. Good analytical skills, with the ability to digest and summarize

CBN CFB AppendixC


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Rule SectionRule

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multiple sources of information

vi. Accountable for actions and decisionsvii.Resilient and ability to operate in a lively, fast-paced environmentviii.Self-confidentix. Discrete and ethicalx. Well-organisedxi. Outstanding business communication and interpersonal skills

1263 Generic Skills for Chief Dealer/Financial Markets Officer/Dealers:i. Articulate, clear communicatorii. Strong client service ethiciii. Excellent IT and numeracy skillsiv. Driven to work in a team setting

CBN CFB AppendixC

1264 Minimum QualificationsA first degree and relevant professional certifications such as ACI orTreasury Dealership Certificate (TDC)

CBN CFB AppendixC

1265 Minimum Experiencei. Minimum of 12 years post qualification experience for chief dealer

out of which 8 years have been spent in treasury related functionii. Minimum of 2 years treasury experience for dealers

CBN CFB AppendixC

TerminationofMembership(SuspensionandRevocation of

1281 i. The FMDQ may suspend members, acting in a manner contraryto these guidelines, from dealing in the money market. Suspension,

which will be preceded by a written warning, may arise if three

reported cases of misconduct are established against the erring

party

ii. The written warning will be issued after the second offence. The

FMDQ GTMM Sec.2.2


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Licence) period of suspension may not exceed six calendar months. The

CBN will be advised of this suspension from the market

Obligations &Rights

MarketMaking

1311 Quoting trading members shall

i. give two-way quotes for standard amount and spread withoutundue delay, during trading hours (Current practice is thattrading members give one-way quote for a specifiedamount)

ii. deal, for at leastthe specified amount, if calling trading memberfinds one of its quotes attractive

FMDQ GTMM Sec.

2.3.1

1312 Calling trading members shall

i. decide promptly what to do on the quote supplied by the quotingtrading member, during trading hours.ii. call a quoting trading member as many times as it desires during

trading hoursiii. close one deal per quote or phone call, if it finds one of the

quoting trading members rates attractive.iv. reserve the right not to deal if it finds the quotes unattractive

FMDQ GTMM Sec.

2.3.2

Manipulativeor otherFraudulentDevices

1321 i. Trading members are expected to be professional in their dealingsii. They shall refrain from engaging in any activity that could impact

negatively on the money marketiii. Trading members are in a position of the highest trust and

responsibility and shall always conduct themselves in a manner asto be worthy of this

CBN MMDS Sec.5.1


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Rule SectionRule

Sub-SectionRuleCode


Trading &Execution

Types ofTransactions

1411 A. Inter-bank Transactionsi. Unsecured placements & takings i.e. Overnight, Call, Tenored

(Current practice is that minimum of 24 hours notice is

required by a trading member to re-price or liquidate calltransactions)

ii. Secured placements and takings i.e. Open-Buy-Back (OBB) andFixed-Buy-Back (FBB)

iii. The pledged Treasury bills for OBB transactions shall not betreated as a sale, but shall remain in the books of the trading

members that pledged the treasury bills as part of their other

assets and not reported as liquid assets

iv. The tenors of the inter-bank transactions shall range fromovernight to 364 days (Current practice is that trading

members active transactions range from overnight to 30

days)

B. Repo (Repurchase Agreement)i. A repo is a borrowing or funding transaction whereby the first party

borrows money from the second party, using the asset as collateral.At the end of the agreed period, the first party repays the secondparty, the repo interest and repurchases the asset

Market

Practice

CBN CTOT


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1412 CBN and Trading MembersTransactions

A. Standing Lending Facility:i. The CBN Standing Lending Facility (SLF) is an overnight

advance available to trading members

ii. The SLF rate is set by the Monetary Policy Committee (MPC) ofthe CBN and is published on the CBN website. It is theapplicable Pricing Rate pursuant to section 2 of the NMRA

B. Standing Deposit Facilityi. The CBN Standing Deposit Facility (SDF) is the deposit facility

for trading members to place overnight excess funds with theCBN

C.Term Repurchase Facility

i. Term repos can be transacted with the CBN for periods and atrates as published on the CBN website. The term repo rate is the

applicable Pricing Rate pursuant to section 2 of the NMRA

CBN

CBN

CBN

GEDWO Sec.

27 & 32

GCRC Sec III

(5)

GCRC Sec III

(6)

1413 Purchase & Repurchase Pricesi. The purchase price is the price at which the purchased securities

are to be transferred from seller (borrower) to buyer (lender) onthe purchase date

ii. The price will be calculated using appropriate market yields andafter applying the appropriate margin ratio

iii. The repurchase price is the price at which the purchased securitiesare to be transferred from buyer to seller on the repurchase date.It is calculated using a money market formula with the applicablerate being either the rate as applied to the SLF (in the case of anSLF transaction) or the relevant term repo rate (in the case of a

TRF transaction)

CBN GCRC Sec IV

(8-9)


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1414 Purchased Securitiesi. The CBN will accept the following securities for the standing

lending and term repo facilities:

Nigerian Treasury bills Federal Government of Nigeria bonds CBN bills Asset Management Corporation of Nigeria (AMCON) bonds

ii. The maturity dates of all securities to be used must be at least 3business days after the repurchase date of the transaction

CBN GCRC Sec IV

(10-11)

1415 Market Value of Purchased Securities (MVPS)i. The MVPS will be based on yields as obtained from generally

recognised sourcesii. Up-to-date secondary market yields will be obtained from FMDQiii. In the absence of secondary market yields for AMCON bonds,the CBN will use the equivalent modified duration of FGN bond

yieldsiv. A margin may be added if the CBN considers that the AMCON

bond should trade at premium (in yield) to FGN bonds

CBN GCRC Sec IV

(17,19)

1416 Margin Ratioi. The CBN will apply a margin ratio to compensate for the risk that

the value of securities could fall during the period of the repoii. For securities with a term-to-maturity of less than 5years, the

margin ratio will be 1.05, and for securities of greater than 5years,the margin ratio will be 1.10

iii. Where there is a combination of securities provided (i.e. someshorter than 5years and some longer than 5years), the marginratio will be a weighted-average of the securities provided

iv. In recognition of the fall in price of a bond after the coupon isdue together with the requirement for the buyer to transfer the

CBN GCRC Sec IV

(12-14)


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coupon to the seller, where a bond provided has an incomepayment date that falls within the period of the repo, then theapplicable margin ratio for such transaction will be increased byone half of the coupon rate applicable to the bond

1417 Margin Maintenancei. CBN may request that a trading member make a margin transferii. The CBN may make such a request in the circumstances where

the MVPS together with the market value of margin transfers(cash and securities transferred when meeting previous margintransfers) falls below 102 percent of the aggregate of therepurchase prices of all repo transactions undertaken between theCBN and the particular trading member

iii. Margin transfer can be made in either cash (cash margin) or insecurities (margin securities)

iv. The CBN may require that all margin transfer be in the form ofmargin securities

v. The value of the margin transfer must be such that the ratio ofMVPS plus margin transfer divided by the aggregate of allrepurchase prices, restores the margin ratio to the ratio applicableat the commencement of the repos (the ratio may be a weighted-average in circumstances where some securities have a term-to-maturity of less than five years and some have more than fiveyears

vi. When the CBN gives notice of a margin transfer, the tradingmember must transfer to the CBN, the cash margin and/ormargin securities by 3pm on the day after which the margin

transfer was requested

CBN GCRT Sec. IV

(20-24)

1418 Treatment of Coupon Paymentsi. Where a transaction extends over the income payment date (i.e.

coupon payment date), the buyer (CBN) shall credit the seller(trading member) with income received on the same day that it

CBN GCRC Sec. IV

(25)


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receives the income

1419 Substitution of Securitiesi. Substitution of securities under the standing lending and term

repo facilities is not allowed

CBN GCRC Sec. IV(26)

TradingHours

1421 Inter-bank Transactionsi. Trading hours shall be between 10.00am to 2.00pm every working

day (Current practice is 9.00am to 6.30pm)

FMDQ GTMM Sec.

2.11

1422 CBN/Trading Members Transactions

i. The standing lending facility is available between the hours of2.00pm and 3.30pm every working dayii. The term repo facility is available between the hours of 9.00amand 3.30pm every working day

CBN GCRT Sec. 5

& 6

TradingParameters

1431 Standard Amount

i. Inter-bank transactions: There is no standard amount for inter-bank transaction

ii. Transactions under SLF and term repo can be conducted inamounts (based on the face values) of a minimum of N100million and in multiples of N1 million thereafter

Market

Practice

CBN

GCRT Sec. 5

& 6

1432 Spreadi. There is no standard spread for the inter-bank transactions Market

Practice


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Trading Halt1461 FMDQ may declare a trading halt in circumstances where trading

activity:i. is being or could be undertaken by persons possessing

unpublished price-sensitive information that relates to that

securityii. is being influenced by a manipulative or deceptive trading

practice; or

iii. may otherwise give rise to an artificial price for that securitywhere the bond market becomes illiquid due to some externalevent

FMDQ IIMMA Sec.4.5

Other TradingPractices

1471 Mode of Communication

i. Current practice is that dealings are done on telephoneMarketPractice

1472 Concluding a Deal

i. A deal shall be consummated when the calling trading memberconfirms placing or taking a specified amount quoted for at the

bid or offer rate indicated by the quoting trading member

ii. A trading member shall not refuse to deal after quoting a rate, ifthe calling trading member decides to place or take at either of the

rates quoted

FMDQ GTMM Sec.

2.13


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Sub-SectionRuleCode


Clearing &Settlement

TradeReporting

1511 Standing Lending Facility & Term Repo Facility:

i. A trading member wishing to access funds through the SLF andTRF must submit a request to Central Securities Clearing System

(CSCS) for it to transfer securities from the account of the tradingmember to the account of the CBN

ii. The trading member shall provide to the Market LiquidityManagement Office, Financial Markets Department, CBN Lagos,

in line with current deadlines, a copy of the confirmation that the

securities have been transferred

CBN GCRC Sec.(IV)

28

TradeConfirmation

1521 i. Current practice is that confirmation of trades by tradingmembers are done by telephone and exchange of letters

Market

Practice


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TradeSettlement

1541 A. Unsecured Transactionsi. The standard settlement date is T + 0 or as mutually agreed

by the trading members for the unsecured transactions

ii.

Unsecured transactions (O/N & Call) shall be settled throughthe Real Time Gross Settlement (RTGS)

B. Secured Transactionsi. The securities and funds (principal) are transferred by the

trading members on T+0 for the OBB, or as mutually agreed

for FBB & repo on the trade initiation day

ii. On maturity day, the equivalent funds (principal + interest)and securities shall be transferred between trading members

iii. Secured transactions are settled through the CBNs T24platform

C. CBN Standing Lending & Deposit Facilitiesi. Standing lending and deposit facilities settle on T+0 basis

D. Reposi. Once the CBN receives acknowledgement from CSCS that

the collaterals (FGN bonds) have been moved, it will credit

the trading members T24 account with the purchase price of

the repo

ii. On the repurchase date, the trading members T24 account atthe CBN will be debited with the repurchase price and thepurchased securities will be transferred to the trading

members account at the CSCS

Market

Practice


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DisputeResolution

Mediation1611 Initiation

i. A trading member must file a request for mediation to FMDQii. FMDQ shall contact the other trading member to confirm if they

agree to mediate or arbitrate the dispute

FMDQ

1612 Selectioni. FMDQ shall assist in the selection of a mediator (a financial markets

expert) by providing the trading members a list of mediators fromwhich to choose along with a detailed report on mediatorsbackground (disclosure report) for each mediator

ii. The trading members shall select a mediator that they all agree towork with

FMDQ

1613 Sessionsi. The trading members, their representatives and the mediator must

sign FMDQs Mediation Submission Agreement (MSA) before themediation can take placeii. FMDQ shall schedule and communicate the mediation date and

locationiii. The trading members shall discuss all the areas of dispute under the

mediators guidance

FMDQ

1614 Settlementi. If the trading members agree to settle, FMDQ shall draft an

enforceable agreement for both trading members to sign

FMDQ

1615 Impasse

i. If the trading members do not reach a settlement, an arbitration casecan be filed, or, if one was previously filed, request can be made tocontinue the case

FMDQ
http://www.finra.org/ArbitrationAndMediation/Mediation/Process/InitiateaMediation/http://www.finra.org/ArbitrationAndMediation/Mediation/Process/MediatorSelectionhttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/MediationSessionshttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/Settlementhttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/Impassehttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/Impassehttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/Settlementhttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/MediationSessionshttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/MediatorSelectionhttp://www.finra.org/ArbitrationAndMediation/Mediation/Process/InitiateaMediation/


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1616 Feesi. Trading members shall be required to pay administrative fees for

mediating through FMDQ and are responsible for the mediator's feeand attendant expenses

FMDQ

Arbitration1621 Filing a Claim

i. The trading member (claimant) initiating the arbitration shall submita Statement of Claim, which includes a description of the dispute,the parties involved, relevant facts and remedies requested either bymail or online to FMDQ

ii. Claimant shall also submit the appropriate filing fee as may bedetermined by FMDQ

FMDQ

1622 Answering a Claimi. FMDQ shall notify trading member (respondent) of the case by

sending or serving respondent a case packet by mail. If therespondent is registered with FMDQ, the respondent must arbitratewith claimant

ii.A respondent shall respond to an arbitration claim by filing ananswer that specifies the relevant facts and available defenses to thestatement of claim

iii.A respondent shall have 48 hours to research the claim, prepare andserve a response

FMDQ

1623 Selectioni. FMDQ shall analyse the claim, the nature of the dispute and the

type of financial instruments involved, and decide how many

arbitrator(s) will be requiredii. FMDQ will provide list of possible arbitrators with a detailed report

on each arbitrators background (a disclosure report) for the case toboth trading members of the dispute

iii.Both trading members shall be allowed to determine the arbitratorsfor the case

FMDQ
http://www.finra.org/ArbitrationAndMediation/Arbitration/Process/FileClaimhttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/AnswerClaimhttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/ArbitratorSelectionhttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/ArbitratorSelectionhttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/AnswerClaimhttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/FileClaim


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1624 Pre-Hearing Conferencesi. FMDQ will schedule an Initial Pre-Hearing Conference (IPHC) with

the arbitrator(s) and trading members representatives. The IPHCwill hold over the telephone or other electronic means such as

VOIP etc.ii. FMDQ will notify the trading members and arbitrator(s) of the date

and time of the IPHC at least 72 hours prior to the conferenceiii.FMDQ shall provide arbitrators with any written submissions

pertaining to the issues or disputes to be addressed at the conferenceprior to a IPHC

iv.At the IPHC, the panel will schedule evidentiary hearing dates; setdiscovery date, briefing date and motions deadlines; and, addressother preliminary matters

v.At the conclusion of the IPHC, the chairperson shall sign theHearing Scheduling Order on behalf of the panel and submit it tothe FMDQ for distribution to the trading members

FMDQ

1625 Discovery - Exchange of documents/ information & identify witnesses

i. Trading members must produce all documents required or agreed tobe produced

ii.Trading members are required to serve on each other copies ofdocuments in their possession that they intend to present at thehearing and to identify witnesses they intend to call at least 72 hoursprior to the first scheduled hearing date

iii.Any trading member that is unable to provide required documentsshall state the reasons in writing

iv.Trading members may shorten or lengthen the exchange deadlinesby agreement

v.The witness lists will also be sent to the arbitrators by FMDQ forreview prior to a hearing

FMDQ
http://www.finra.org/ArbitrationAndMediation/Arbitration/Process/PrehearingConferenceshttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/Discoveryhttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/Discoveryhttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/PrehearingConferences


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1626 Hearingsi. The trading members and arbitrators shall meet in person to

conduct the hearing in which the trading members shall presentarguments and evidence in support of their respective cases

ii.Arbitrators may proceed in the absence of a trading member if itfails to appear at a hearing after having been duly notified of thetime, date and place of the hearing by FMDQ

Witnessesi. Unless all parties agree otherwise, the panel shall not allow fact

witnesses whilst expert witnesses shall be permitted to attend allhearings

Starting the hearingi. Hearings shall be held at FMDQ office, or any other location as may

be agreedii. FMDQ will handle all logistics for the hearing and communicate to

the trading members and the arbitrators

Record of the Hearingi. All hearings shall be digitally recordedii. Arbitrator(s) shall employ an attendance list to track the attendance

of the trading members, representatives and witnesses; and anexhibit list (claimants exhibits and respondents exhibits) to trackthe trading members exhibits in order to ensure complete record ofthe hearing

Exclusion of Evidence During the Parties Presentationi. Arbitrator(s) may exclude from the hearing any documents not

exchanged during the discovery periodii. Arbitrator(s) may exclude from the hearing witnesses not identified

during the discovery period

Executive Sessionsi. Executive sessions (separate discussions among the arbitrators) shall

be held outside the presence of the trading members and theirrepresentatives and witnesses

ii. All executive sessions shall be off the record

FMDQ
http://www.finra.org/ArbitrationAndMediation/Arbitration/Process/Hearingshttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/Hearings


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Exiting the Hearing Roomi. At the conclusion of a hearing, a pre-designated panel member shall

collect all accepted exhibits and return them to FMDQ as theofficial record

ii. FMDQ shall release all case-related materials to arbitrator(s) ifdiscussions are adjourned1627 Decision

i. Arbitrator(s) shall review the hearing record, the pleadings andsubmissions and their notes before they deliberate the facts of thecase and render a written decision called an award

ii.Arbitrator(s) may also request that the trading members submitpost-hearing briefs to help clarify issues

Rendering the Awardi. Arbitrator(s) shall be required to render an award within 24 hours

from the date the hearing is concludedForm of the Award

i. All awards must be in writing and signed by all the arbitrators. Anarbitrator who disagrees with the award may note the dissent

ii.All awards rendered are legally binding and final and are not subjectto review or appeal within FMDQunless there is a challenge fromthe Oversight Committee

Awarding Fees and Costsi. Arbitrator(s) shall decide which trading member shall pay the costs

incurred as a result of the arbitrationArbitrator Immunity

i. Arbitrators shall have immunity from civil liability that may arise outof their conduct while serving as arbitrators

Penaltyi. Trading members must comply with the award within 24 hours. Any

trading member that does not comply in a timely manner may besuspended by FMDQ

FMDQ
http://www.finra.org/ArbitrationAndMediation/Arbitration/Process/DecisionAwardshttp://www.finra.org/ArbitrationAndMediation/Arbitration/Process/DecisionAwards


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Rule SectionRule

Sub-SectionRuleCode


Challenging Arbitration Decisioni. A trading member may challenge an arbitration decision by

requesting the Oversight Committee to set the award aside as voidii. The motion must be made within 24 hours of the award


25/25

25

Reference

S/N Acronym Description

1 GTMM Guidelines for Two-Way Quote Trading in Money Market (Inter-bank Placements/Deposits)2 GPD Guidelines for Primary Dealership in Money Market Instruments (July 18, 2006)3 CABD CBN Circular on Appointment of Deposit Money Banks and Discount Houses as Money Market Dealers (May

25, 2012)

4 GEDWO Guidelines on the Expanded Discount Window Operations20085 CTOT CBN Circular on Treatment of Open-Buy-Back Transactions by Banks20036 GCRC Guidelines for the Conduct of Repurchase Transactions under CBN Standing FacilitiesApril 20127 IIMMA Inspection and Instruction Manual of FMDQ OTC Members Activities - November 2011

FMDQ Codified Rule Book Money Market

Documents

Transcript of FMDQ Codified Rule Book Money Market