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Home > Markets and Payments > Money Markets Liaison Committee (MMLC) and Securities Lending and Repo Committee (SLRC)
 

Money Markets Liaison Committee (MMLC) and Securities Lending and Repo Committee (SLRC)

In December 2016 the MMLC and SLRC both agreed new Terms of Reference for a replacement committee, the Money Markets Committee (MMC). This new single committee was formed to focus on strategic issues, alongside sub-committees which will focus on more technical issues.

This page archives relevant MMLC and SLRC publications and documents.
 

Background

The Money Markets Liaison Committee (MMLC) was established in 1999. The MMLC was known as the Money Markets Liaison Group prior to April 2015. It comprised representatives from market participants, trade associations and the authorities. It provided a forum for discussion of structural issues concerning money markets.
 
The Securities Lending and Repo Committee (SLRC) was established in 1990. The committee of international repo and securities lending practitioners and representatives of trade organisations, together with infrastructure providers and the UK authorities, provided a forum in which structural (including legal) developments in the relevant markets can be discussed by practitioners and the authorities.
 

Money Market Liaison Comittee Term DBV Sub-Committee

DBV (Delivery-by-value) is a settlement mechanism in CREST. It allows members to instruct the delivery of a specified value of securities from a defined set (such as conventional UK gilts or FTSE 100 equities) to a counterparty, rather than needing to detail the quantities of each individual security to be delivered. DBV transactions can be arranged against payment or free of payment.
 
Before July 2011, DBVs could only be conducted as overnight transactions, settling in the afternoon and then automatically unwinding on the following morning. Underlying deals with a term greater than one day could only be accommodated by inputting a series of overnight transactions during the life of the term, resulting in unnecessary intra-day cash flows, settlement risk, and operational risk. A Term DBV product was introduced by EUI in July 2011. This allows CREST members to undertake a single DBV transaction which reflects the duration of the underlying deal – between one day (i.e. overnight) and two years. The advantage of this product is that it does not unwind each day, reducing unnecessary cash flows, settlement risk and operational risk.
 
Migration of gilt repo business to the Term DBV product was supported by a sub-committee of the Money Markets Liaison Committee (MMLC) – the Term DBV Sub-Committee, a joint initiative between the Bank, the London Money Market Association (LMMA), Euroclear UK & Ireland and LCH. This migration was phased as follows:
 
  • September 2015: Migration of cleared DBV gilt trades to LCH’s new Term £GC product.
  • September 2016: Migration of bilateral DBV gilt trades to the Term DBV product.
The Term DBV Sub-Committee was disbanded in September 2016 following the successful migration of gilt repo DBV business to the Term DBV product. Euroclear UK & Ireland is separately taking forward work to migrate equities business to the Term DBV.
The Term DBV good practice guidelines produced by the sub-committee can be found below:
 
 

Money Market Liaison Comittee Survey

The Bank carried out the Sterling Money Market Survey twice a year on behalf of the Money Market Liaison Committee (MMLC) from (2011 to 2016).
 
The qualitative data collected through the MMLC Survey process will now be gathered annually by the Bank in its role as administrator of the SONIA interest rate benchmark.
In 2015, the Bank announced the introduction of a new formal data collection, to be known as the Sterling Money Markets (SMM) collection, through which it would collect data on transactions each day, from institutions active in sterling money markets. The aim was to secure and improve the information available to the Bank on conditions in money markets, which would benefit the Bank’s analysis on both monetary and financial conditions. The Bank consulted on the detail of its approach over the summer 2015 and published its final position in November 2015.
 
The data collected through the SMM collection succeeds that collected through the semi-annual MMLC survey. As a result, to avoid duplication, the survey is no longer collected separately and the 2016 May MMLC Sterling Money Market Survey report was the last to be published in the established format.
 
 

Other Money Market Liaison Comittee Publications

In 2012 the MMLC Operations Sub-Committee led a test exercise designed to simulate the impact of an extreme failure of the UK payment and settlement infrastructure (below).
 
 
The MMLC developed a contingency matrix, which summarises how the main infrastructure providers would respond to different operational contingencies and how different decisions will be taken.  
 
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