UK Treasury Plans to Criminalise All Benchmark Fixing LIBOR-Led by Example
by
George Tchetvertakov
After the horse has already bolted, the UK Treasury begins a consultation into closing the barn door.
The UK Treasury is considering applying the same criminal consequences that apply to LIBOR rates to other benchmark rates in the financial markets.
The government agency is consulting on extending the new market manipulation legislation onto benchmark rates such as the Sterling Overnight Index Average (SONIA) and Repurchase Overnight Index Average (RONIA) rates. Both are reference rates for overnight index Swaps. Other benchmarks considered for inclusion are the WM/Reuters 4pm London Fix, a core foreign Exchange benchmark for institutional traders; and ISDAFix, the principal global benchmark for swap rates.
Commodity market benchmarks considered for inclusion are the London Gold Fixing, the LBMA Silver Price rates and the ICE Brent futures contract, the world's most-traded crude oil future. As with the new LIBOR offences, making false or misleading statements in relation to these rates would carry prison sentences of up to seven years and unlimited fines.
Parallel to the Treasury’s announcement, the Economic Secretary Andrea Leadsom said: "The integrity of the City matters to the economy of Britain." Adding, "Ensuring that the key rates that underpin financial markets are robust, and that anyone who seeks to manipulate them is subject to the full force of the law, is vital. That's why the government is determined to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them."
Bombastic and ironic words to be sure, at a time when the British government is pushing forward with astute austerity measures forced by large-scale bank bailouts. A large portion of those bailouts rescued insolvent firms at a large expense to the taxpayer. Private losses were nationalised and public profits were privatised with the benefits going to the 'few' while the costs to 'many'.
Review and Reflect
The Fair and Effective Markets Review, a joint initiative by the Treasury, Bank of England and Financial Conduct Authority (FCA), is a key part of the consultation process according to the Treasury with the report’s publication expected in June 2015. The consultation is open for public submissions with the summary: "This consultation seeks views on which additional major financial benchmarks should be brought into the regulatory framework originally implemented for LIBOR."
Despite the Fair and Effective Markets Review expected to be completed only as late as mid-2015, Her Majesty's Treasury is committed to enforcing the proposed changes by the end of this year with consultations ending on October 23rd.
To date, not a single employee of any firm has been charged with a criminal offence relating to price fixing of any market, despite dozens of confirmed cases of market manipulation between multiple banks involving dozens of individuals. To what extent this latest proposed extension of legislative powers aids accountability and deters market manipulation among gargantuan financial intermediaries is up for debate.
The UK Treasury is considering applying the same criminal consequences that apply to LIBOR rates to other benchmark rates in the financial markets.
The government agency is consulting on extending the new market manipulation legislation onto benchmark rates such as the Sterling Overnight Index Average (SONIA) and Repurchase Overnight Index Average (RONIA) rates. Both are reference rates for overnight index Swaps. Other benchmarks considered for inclusion are the WM/Reuters 4pm London Fix, a core foreign Exchange benchmark for institutional traders; and ISDAFix, the principal global benchmark for swap rates.
Commodity market benchmarks considered for inclusion are the London Gold Fixing, the LBMA Silver Price rates and the ICE Brent futures contract, the world's most-traded crude oil future. As with the new LIBOR offences, making false or misleading statements in relation to these rates would carry prison sentences of up to seven years and unlimited fines.
Parallel to the Treasury’s announcement, the Economic Secretary Andrea Leadsom said: "The integrity of the City matters to the economy of Britain." Adding, "Ensuring that the key rates that underpin financial markets are robust, and that anyone who seeks to manipulate them is subject to the full force of the law, is vital. That's why the government is determined to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them."
Bombastic and ironic words to be sure, at a time when the British government is pushing forward with astute austerity measures forced by large-scale bank bailouts. A large portion of those bailouts rescued insolvent firms at a large expense to the taxpayer. Private losses were nationalised and public profits were privatised with the benefits going to the 'few' while the costs to 'many'.
Review and Reflect
The Fair and Effective Markets Review, a joint initiative by the Treasury, Bank of England and Financial Conduct Authority (FCA), is a key part of the consultation process according to the Treasury with the report’s publication expected in June 2015. The consultation is open for public submissions with the summary: "This consultation seeks views on which additional major financial benchmarks should be brought into the regulatory framework originally implemented for LIBOR."
Despite the Fair and Effective Markets Review expected to be completed only as late as mid-2015, Her Majesty's Treasury is committed to enforcing the proposed changes by the end of this year with consultations ending on October 23rd.
To date, not a single employee of any firm has been charged with a criminal offence relating to price fixing of any market, despite dozens of confirmed cases of market manipulation between multiple banks involving dozens of individuals. To what extent this latest proposed extension of legislative powers aids accountability and deters market manipulation among gargantuan financial intermediaries is up for debate.
Cheetah Fund Investors Lose $9 Million in Alleged Fraudulent Scheme
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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