brokerage, as well as governance, and risk management and compliance. we have made substantial progress in drafting the second phase. it will be circulated for comment through the various fxcs in early october. so, the jsc will be providing feedback on behalf of the london market. as was the case with the first phase, there will be three opportunities for market participants to provide feedback on the material over the next six months or so. we will endeavour to make clear how the feedback provided has been addressed through each of the feedback phases. the aim is for the full code to be published in may 2017 and we are on track to achieve that. i will now talk about a couple of the areas that are addressed in the first phase of the code, which is already in the public domain. in the first phase, topics were covered that the market was looking for guidance on sooner rather than later and that were potentially having an adverse effect on market functioning. one example of this is around information sharing, where many market participants have highlighted that they are unsure what information can be conveyed to counterparties and other market participants. while it is clear ( or at least should be ) that disclosing the details of a client ’ s order book to a counterparty is not acceptable, market participants have noted that there is much less clarity around what level of aggregation, say, is necessary in order to convey market colour appropriately. as a result, it appears some market participants are being very conservative in sharing information, which can have implications for the effective functioning of the market. this is notwithstanding the guidance provided in this area in the global preamble put out by the global foreign exchange committees, in march 2015. 4 the global code takes the material in the global preamble and fleshes it out a bit more, including with some examples of what is, and isn ’ t, appropriate communication, and why. there will be more examples on information sharing provided in the second phase of the code. similarly, there have been diverse opinions around what is appropriate behaviour in terms of order handling. while there have been some very public instances of inappropriate behaviour around order handling that have come to light in recent years, in other areas, the market is seeking greater guidance as to what principles should be followed, including the different standards that may apply depending on whether an intermediary is functioning as principal or agent. 5 this is one area that was not adequately covered in the pre - existing codes of conduct that the 2 / 4

we will announce our intentions at 11. 15 am. if conditions warrant it, we will return to daily bond purchases. i would like to restate that we are buying bonds in the secondary market and we are not buying bonds directly from the government. one of the underlying principles of australia ’ s institutional arrangements is the separation of monetary and fiscal policy – that is, the central bank does not finance the government, instead the government finances itself in the market. this principle has served the country well and i am confident that the australian federal, state and territory governments will continue to be able to finance themselves in the market, as they should. while we are not directly financing the government, our bond purchases are affecting the market price that the government pays to raise debt. our policies are also affecting the price that the private sector pays to raise debt. in this way, our actions are affecting funding costs right across the economy as they should in the exceptional circumstances that we face. but our actions should not be confused with the reserve bank financing the government. another element of the recent package was the term funding facility. around $ 3 billion of the initial allowance of $ 90 billion has already been drawn under this facility, with around 35 institutions participating so far. the knowledge that adis have access to this scheme over coming months has reduced any concerns there might have been about possible future liquidity strains. in doing so, this scheme has supported confidence that australia ’ s adis will be able to access the liquidity needed to support their customers. it has also contributed to the low cost of borrowing new funds at fixed interest rates for businesses and households. the drawings under this facility, combined with the bond purchases and the reserve bank ’ s open market operations, have resulted in the balances held in exchange settlement accounts increasing substantially. at the beginning of march these balance stood at around $ 2½ billion. today, they stand at $ 83 billion. on the other side of the reserve bank ’ s balance sheet, there 4 / 5 bis central bankers'speeches are increased holdings of government bonds, purchased both outright and under repurchase agreements in our daily open market operations. the very large increase in the balances in exchange settlement accounts has affected the operation of the cash market. the number of transactions in this market has declined as fewer institutions need to borrow settlement balances each day. the cash rate has also drifted below 25 basis points and today is at 15 basis points. both of these changes are consistent with experience in other