Market Notice - April 2021
Changes to the Operating Rules and Principle for BKBM
The New Zealand Financial Markets Association (NZFMA) has made two changes to the Operating Rules and Principles for BKBM. Rules 6.2.6 and 6.2.7 have been redrafted to clarify the intention of the rules following notification from BKBM participants that more clarity was needed.
The change to 6.2.6 is relatively minor, while 6.2.7 has been adjusted to make it clear that BKBM participants can be full on one other participant's prime bank bill paper and still be able to place a bid in the two-minute rate-set window.
The NZFMA sought feedback from BKBM participants, the NZFMA's Rates Committee, the NZFMA's Benchmark Oversight Committee and the NZFMA's Board. The NZFMA also sought legal advice that the redraft complies with the Commerce Act.
The NZFMA's view is that the proposed changes clarify the intention of both rules while retaining the integrity of the BKBM process. The updated BKBM Operating Rules and Guidelines can be found here.
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