The provision of liquidity-support commitment by the banks to the structured investment vehicles (SIVs) was yet another factor that exposed the banks to the liquidity risks faced by the SIVs. The SIVs encountered the liquidity squeeze when they could not roll over their short-term funding raised through the Asset-Backed Commercial Paper (ABCP) for financing their long-term assets.
The second phase covered further aspects of execution including e-trading and platforms, prime brokerage, as well as governance, and risk management and compliance. The complete Code comprises 55 principles spanning these issues. The principles are written in plain language and should be easily read and understood by market participants. The principles are supplemented by a suite of examples to illustrate their practical application.