On December 22, 2014, the Financial Conduct Authority ("FCA") issued a consultation paper on the seven additional UK-based financial benchmarks that it anticipates to regulate from April 2015. The Inter-Bank Offered Rate (known as LIBOR) is currently the FCA's only regulated benchmark. The seven additional benchmarks are: (i) the Sterling Overnight Index Average; (ii) the Repurchase Overnight Index Average; (iii) ISDAFIX; (iv) the WM/Reuters London 4pm Closing Spot Rate; (v) London Gold Fixing; (vi) the London Bullion Market Association Silver Price; and (vii) the ICE Brent Index. The consultation proposes that benchmark administrators will be required to: (i) implement governance and oversight practices as well as an oversight committee so that robust measures are in place to administer the benchmarks; (ii) examine and keep records of benchmark submissions, so that breaches of practice standards and potentially manipulative behavior are swiftly identified; (iii) maintain adequate financial resources to be able to cover operating costs for six months; and (iv) appoint a FCA approved individual to ensure the firm's compliance with the FCA's requirements for benchmark administration. The consultation closes on January 30, 2014.
The consultation paper is available at:
http://www.fca.org.uk/your-fca/documents/consultation-papers/cp14-32.
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