Fair and Effective Markets Review published

The Fair and Effective Markets Review (FEMR) was a comprehensive and forward-looking assessment of the way fixed income, currency and commodity (FICC) markets operate.

FEMR was led by the Bank of England, and co-chaired by the FCA and HM Treasury. The three organisations published the final report of the review, including findings and recommendations, on 10 June 2015.

The FEMR final report included 21 recommendations designed to ensure that FICC markets are fair and effective, and enhance the measures already in progress to tackle the issues highlighted by FEMR’s findings and recent enforcement actions.  

Accepting the recommendations on behalf of the FCA Board, John Griffiths-Jones said:

'I wholeheartedly welcome the review’s recommendations on behalf of the FCA and its board and believe they will make a real difference to the consumers and businesses that ultimately rely on these markets.

Putting good conduct and accountability at the heart of these vital global markets will safeguard their future integrity, and the UK’s pre-eminent position in them.'

Key recommendations

The recommendations include measures to:

  • raise standards, professionalism and accountability of individuals
  • improve the quality and clarity and market-wide understanding of FICC trading practices
  • strengthen the regulation of FICC markets in the UK
  • launch international action to raise standards in global FICC markets, particularly the spot FX market

Read the FEMR final report and recommendations

The FCA and HM Treasury have already implemented the Review’s October 2014 recommendation that a further seven key benchmarks  should be brought within the scope of regulation, in addition to LIBOR, effective from 1 April 2015.

On 28 July 2016, the Chairs of FEMR published a full implementation report to the Chancellor of the Exchequer, the Governor of the Bank of England and the Chairman of the Financial Conduct Authority, detailing the significant progress that has been made to implement the Review’s recommendations.

Next steps

Where recommendations call for changes in regulation, we will consult on how to implement these changes with the Bank of England, HM Treasury, the Competition and Markets Authority (CMA) and international regulators as appropriate.

These recommendations do not change the FCA’s current rules. However, if you operate in FICC markets you may consider it helpful to review whether any of the findings or recommendations of FEMR are relevant to your business.