Monday, 22 December 2014

Clampdown on market rigging

Key benchmarks in the financial markets, including significant foreign exchange rates, the London Gold Fixing and the price of Brent crude will be subjected to strict regulation from April next year.

The clampdown comes in the wake of the Libor scandal, over the attempted rigging of interbank interest rates.

The Chancellor has confirmed a list of 7 indicators -- in addition to Libor -- where manipulation will be formally banned.

Those found guilty of manipulating these benchmarks would face up to 7 years in prison.

The full list, recommended by the official Fair and Effective Markets Review in September includes:

*The WM/Reuters 4pm London Fix, which is the dominant global foreign exchange benchmark

*The Sterling Overnight Index Average (SONIA) and the Repurchase Overnight Index Average (RONIA), which both serve as reference rates for overnight index swaps;

*The ISDAFix, which is the principal global benchmark for swap rates and spreads for interest rate swap transactions;

*The London Gold Fixing and the LMBA Silver Price, which determine the price of gold and silver in the London market; and

*The ICE Brent index, which acts as the crude oil market's principal financial benchmark.

The financial watchdog, the FCA, will consult on the detail of the new rules over the next few weeks.

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