Regulation  

Review aims to clean up markets

According to a statement from the Treasury, which together with the FCA and the Bank of England will be conducting the Fair and Effective Markets Review, the outcomes will aim to improve conduct and clean up the wholesale operations of financial markets.

Minouche Shafik, BoE deputy governor for markets and banking, will chair the review panel. Martin Wheatley, chief executive of the FCA and Charles Roxburgh, director-general of financial services at the Treasury, will be co-chairmen.

A statement from the Treasury said: “The review reflects the government’s long-term economic plan to ensure Britain remains a world leader in financial services, with successful institutions operating to the highest standards.”

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The announcement followed the publication by the Treasury this April of its report, Improving Regulation of the Financial Sector to Protect Customers and the Economy.

The review, which will draw on the insights of public officials, market participants and users of wholesale financial services, is to run for 12 months.

Areas on which review will make recommendations

Principles governing the operation of fair and effective financial markets

Reforms to ensure standards of behaviour are in accordance with those principles

Tools to strengthen the oversight of market conduct

Whether the regulatory perimeter for wholesale financial markets should be extended

Additional reforms in relation to benchmarks.

George Osborne, chancellor of the exchequer, said: “The integrity of the City matters to the economy of Britain. Markets here set the interest rates for people’s mortgages, the exchange rates for our exports and the commodity prices for the goods we buy. I am going to deal with abuses and tackle the unacceptable behaviour of the few.”

Daniel Godfrey, chief executive of the Investment Management Association, said: “The IMA supports the breadth of this timely review, and will continue to promote ways that asset owners and managers can obtain and demonstrate value for customers when using wholesale markets on their behalf.”

Susan Hill, chartered financial planner at St Alban’s-based Susan Hill Financial Planning, said: “This review is long overdue. We have known about rigging interest rates for a long time. The government should have done this years ago, before RDR. Financial advisers need a transparent market where the financial organisations behind the products we advise on are beyond reproach, otherwise the process lacks credibility.”