On May 24, 2018, the Bank of England, the Financial Conduct Authority and HM Treasury published a progress report on the Fair and Effective Markets Review, outlining the progress made in responding to the FEMR recommendations that were originally published in June 2015 and followed by an implementation report in June 2016.
The three authorities commend the significant progress that has been made by firms, both collectively and individually, in driving up standards in the Fixed Income, Currency and Commodities Markets since the implementation report. The progress report sets out the assessment of the three authorities of the impact of the FEMR's recommendations. In summary, the report highlights that:
- The Senior Managers and Certification Regimes are achieving their policy intent of improving governance and clarifying individual accountability and have been emulated by a number of other jurisdictions;
- FEMR initiatives are helping to raise standards in global FICC markets, notably through widespread adoption of the Global FX Code;
- the FICC Market Standards Board has already produced a number of standards and statements of good practice which have been and will continue to be useful in clarifying "grey areas;"
- A Fair and Effective Markets Reform team has been created by the BoE and the FCA to provide support for and coordination of forward-looking initiatives to identify and mitigate risk;
- The FCA will continue to take a forward-looking and strategic approach to supervision, which will be enhanced by improved new regulation for FICC markets and benchmarks as well as the expended scope of SM&CR from 2019; and
- Significant work has been done on market-led benchmark reform.
The report concludes that, while much has been achieved, it is important that industry take a leading role in monitoring developments and ensuring that market infrastructures and practices keep pace with innovation.
The progress report is available at: https://www.bankofengland.co.uk/-/media/boe/files/report/2018/fair-andeffective- markets-review-progressreport. pdf?la=en&hash=E3F55D5C0600F927F1E767EAA818C4E571E72FD9, the final report of the FEMR is available at: https://www.bankofengland.co.uk/report/2015/fair-and-effective-markets-review---final-report and the implementation report is available at: https://www.bankofengland.co.uk/report/2016/fair-andeffective- markets-review-implementation-report.
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