CP14/32: Bringing additional benchmarks into the regulatory and supervisory regime

This consultation paper seeks views on how our generic approach to regulating benchmarks could be applied beyond LIBOR to other benchmark administrators (and benchmark submitters as appropriate).

Why are we publishing this paper?

Following misconduct related to the London Inter-Bank Offered Rate (LIBOR) benchmark, we were given powers to regulate benchmarks specified by the Government in April 2013. Currently, LIBOR is the only regulated benchmark.

The Government’s Fair and Effective Markets Review (terms of reference) has recommended an additional seven benchmarks that should be regulated by us. The Treasury subsequently consulted on the legislative measures to specify further benchmarks to be regulated by us and has published feedback from the consultation process.

The benchmarks that are being brought into the regulatory scope are:

  • Sterling Overnight Index Average (SONIA)
  • Repurchase Overnight Index Average (RONIA)
  • ISDAFIX
  • WM/Reuters (WMR) London 4pm Closing Spot Rate
  • London Gold Fixing (soon to be replaced by the LBMA Gold Price)
  • LBMA Silver Price
  • ICE Brent Index

We anticipate we will regulate these benchmarks from April 2015.

CP14/32 Bringing additional benchmarks into the regulatory and supervisory regime [PDF]

Who should read this paper?

These changes will affect the administrators of and firms that submit to any of the seven benchmarks (where the benchmark has regulated submitters). These changes will be of interest to firms that use these benchmarks as part of their ongoing business. They will also be of interest to electronic trading platforms in particular and similar entities more generally. These changes may be of interest to other financial institutions with a significant profile in global markets referencing benchmarks. And they may also be of indirect interest to consumers.

Next steps

We want to know what you think of our proposals and welcome comments using our online response form by 30 January 2015.

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