Market Code Simplification
Improvement programme summary
Our Market Code Simplification programme is focused on ensuring the codes are suitably adaptive to enable efficient change, facilitate innovation and lower barriers for entry to the market. Through this programme, we aim to make codes clearer, more transparent, and more accessible by removing complexity and by providing guidance in plain English.
This work will build on the findings of our 2020/21 review of market codes, which is due to conclude prior to the start of 2021/22.
Its delivery is phased across all three years of our business plan and includes:
Application of clear architectural principles - to guide future code development
Simplifying points of complexity - where there is a case for change identified through the findings of the 2020/21 review
Providing plain English guidance on key areas of the market codes
Redesign (re-architecture) of the market codes - in 2023/24 (should a case for such major change be identified through the review)
How trading parties and customers will benefit
The programme is a key component in delivering our Market Improvement strategic priority.
Code complexity contributes to market frictions through indirect costs experienced by trading parties relating to training their teams in complex code rules, resolution of disagreements regarding complex or ambiguous rules and slow pace of change. The simplification of obligations and processes captured in the current market document set would support a maturing market that is better set up to respond to change and, in turn, deliver benefits to customers more quickly.
These improvements will be created by a programme that:
Makes the market codes easier to navigate and more accessible for trading parties
Better supports efficient market entry and competition by reducing the potential for error and disagreement and making the market codes easier to understand for new market entrants
Facilitates flexibility and innovation in governance, with the market codes being quicker and easier to change.
Customers will ultimately benefit from faster development of the market codes which may lead to new innovations and business models entering the market, offering greater choice and value.
How the workstream builds on our current 2020/21 Business Plan
In 2020/21, under the market code review, we have consulted trading parties on the matter of code complexity and this feedback is being considered by the Panel’s Code Advisory Group to inform the way forward.
By the beginning of 2021/22, the code review will have identified architectural principles to guide the design of simple and clear documents going forward. It may also identify areas of complexity in the current market document set that constitute points of friction or opportunities for improvement. These will determine the extent of work through 2021/22 to resolve these points of friction through a blend of simplified code drafting and plain English guidance.
Delivery for 2021/22 – milestones and outcomes