The Financial Conduct Authority (FCA) has updated its websites section on benchmarks. On the web page the FCA states that it has noted that some respondents to its recent Policy Statement 15/6 – ‘Bringing additional benchmarks into the regulatory and supervisory regime’, expressed concerns regarding pricing and costs being passed onto users of benchmarks.
The FCA has stated that it will consider whether it would need to change the Market Conduct rules in MAR 8 and will consult further should it propose to introduce any changes. The regulator now states that it will consult on a rule requiring administrators to offer fair, reasonable and non-discriminatory access and pricing arrangements. They intend to consult the industry in Q2 2015.
“We confirm we will consult on a rule requiring administrators to offer fair, reasonable and non-discriminatory access and pricing arrangements. Our intention is to consult in Q2 2015.” The FCA says on its website.
The regulator then goes on to explain that they help to shape thinking on how to regulate financial benchmarks through their work with international regulatory bodies and with the UK’s Fair and Effective Markets Review. Pointing out that they now regulate LIBOR and other key benchmarks.
The FCA is working with HM Treasury and the Bank of England on newly proposed European-wide rules for benchmarks, and domestic reforms led by the UK Fair and Effective Markets Review. On the world stage they also continue to engage with global regulatory groups, and co-chair the work of the International Commission of Securities Regulators (IOSCO) and the Financial Stability Board (FSB) on benchmarks.
As sanctions for poor behaviour, they point out that they can fine firms and ban traders where they find attempted benchmark manipulation “We have an objective to ensure that markets work well. Key benchmarks are used across the globe, so it is vital that regulators take coordinated steps to improve market integrity.”
FCA Visual on their role in benchmark regulation The FCAs benchmark web page is available here.
The Policy Paper PS15/6: Bringing additional benchmarks into the regulatory and supervisory regime is available here.
The Market Conduct rules for Benchmarks are available here.