Currency to Oil Rates Targeted for Tougher Oversight After Libor Benchmarks underpinning markets from oil to foreign exchange face tougher oversight under plans by global regulators to prevent any repeat of Libor-style fraud. Benchmarks should be based as much as possible on real transaction data, rather than estimates, and banks should tackle conflicts of interest, the International Organization of Securities Commissions, a Madrid-based group that harmonizes global market rules, said in guidelines published today. The measures are “an important step” in restoring the credibility of tarnished benchmarks,” Martin Wheatley, chief executive officer of the U.K. Financial Conduct Authority and a co-head of the Iosco benchmark task force, said in a statement. “These principles set out clear and robust standards.” Authorities are grappling with a growing number of rate-setting scandals. Global regulators have fined UBS AG (UBSN), Barclays Plc (BARC) and Royal Bank of Scotland Group Plc about $2.5 billion for distorting the London interbank offered rate, known as Libor, and similar benchmarks. Probes into potential rigging have expanded beyond interbank lending rates to include benchmarks underpinning energy prices, currency trades and derivatives. Organizations that administrate benchmarks will be required by regulators to “publicly disclose their compliance” with the guidelines within 12 months, Iosco said. The group will carry out a review in 18 months to see how well the measures have been enforced.
Posted on: Wed, 17 Jul 2013 12:22:41 +0000
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