The UK has moved to toughen up regulation in London financial Square Mile with the publication of its ‘Fair and Effective Markets Review’, which promotes a crackdown on rogue traders, and the creation of a Market Standards Board to supervise markets.
According to the Bank of England (BoE), a review was conducted to reinforce confidence in the wholesale fixed Income, currency and commodities (FICC) markets, "in the wake of the serious misconduct seen in recent years."
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The BoE wrote about the misconduct that was witnessed in the market: "Attempted manipulation of benchmarks and market prices, misuse of confidential information, misrepresentation to clients and attempted collusion have led to huge fines, reputational damage, diversion of management resources and the reining in of productive risk taking."
It added that as a result of these misconducts, market effectiveness has been ‘impaired’ and public trust had been ‘severely damaged’.
The final report has set out 21 recommendations shaped around the following six principles.
1) Individuals active in FICC markets should be more accountable for their actions;
2) Firms active in FICC markets should take greater collective responsibility for developing and adhering to clear, widely understood and practical standards of market practice, in regular dialogue with the authorities;
3) The UK authorities should extend the regulatory perimeter, broaden the regime holding senior management to account and toughen sanctions against misconduct
4) International authorities should collaborate to raise standards in global FICC markets
5) To promote fairer FICC market structures while also enhancing effectiveness
6) To ensure a more forward-looking approach to the identification and mitigation of conduct risks.
The Review’s Chairs will provide a full implementation update to the Chancellor of the Exchequer and the Governor of the Bank of England by June 2016.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
