British regulators are seeking to extend their stepped up oversight of LIBOR to seven other financial benchmarks.
The UK Financial Conduct Authority (FCA) said Monday that, starting on Apr. 1, 2015, it will regulate seven additional major financial benchmarks in the fixed income, commodity and currency markets.
Under the proposals, the FCA will require the administrators of these benchmarks and firms that contribute to calculating the benchmarks, to be authorized by the regulator. And, it is proposing that a senior individual within each firm be appointed to oversee compliance with the FCA's requirements, which include that they identify potentially manipulative behaviour, control conflicts of interest, and implement robust governance and oversight arrangements.
This list of benchmarks receiving closer supervision includes the dominant global foreign exchange benchmark, the WM/Reuters London 4 p.m. Closing Spot Rate; the principal global benchmark for interest rate swap transactions, the ISDAFIX; the gold and silver benchmarks, the London Gold Fixing and the LMBA Silver Price; the ICE Brent Index, which is the crude oil futures market's primary benchmark; and, the benchmarks for overnight index swaps, known as the SONIA (Sterling Overnight Index Average) and the RONIA (Repurchase Overnight Index Average).
The FCA says that the proposals are designed to enhance market integrity and bolster investor confidence. "I am determined to ensure that markets work well and preserve the UK's reputation as a centre of excellence for financial services — today's announcement is a vital step in achieving this. This builds on our work to strengthen LIBOR, and drive up standards on benchmarks across the board," said Martin Wheatley, CEO of the FCA.
Comments on the proposals are due by Jan. 30, 2015. The FCA expecst to publish final rules during the first quarter of 2015.