The UK’s Financial Services Authority (FSA) has finalised new rules to control Libor and other financial benchmarks.
The new rules will be regulated from 1 April once the Financial Conduct Authority (FCA) comes into force. Under the final rules, the Libor administrator will need to corroborate submissions and monitor suspicious activity.
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Firms submitting Libor data must outline a clear conflict of interest policy with appropriate systems and controls. The FSA believes this will result in "clear, robust rules", which will give firms and their employees comfort that the regulatory regime will clarify what is expected of them.
The FCA will also introduce two new influence controlled functions under the approved person’s regime for the administrator and submitting firms.
FCA chief executive designate, Martin Wheatley, said: "Confidence and trust are critical to financial markets. That trust has been eroded by the Libor scandal and the recent enforcement action against several banks. These new rules today should help restore that faith and bring integrity back to Libor."
In the last year, the Royal Bank of Scotland, UBS and Barclays have faced billions of pounds worth of global fines after their traders were found to have fixed rates. Last month, an internal review into the FSA’s handling of Libor rigging found failings in its approach.
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By GlobalDataThe FSA said the steps taken would help "restore confidence in financial markets".
