In light of the significant issues raised by investigations into attempted manipulation of benchmarks, in particular the recent incidents involving LIBOR, the International Organization of Securities Commissions (IOSCO) has formed a Task Force on Financial Market Benchmarks to identify relevant benchmark-related policy issues and develop global policy guidance and principles for benchmark-related activities. The high level Task Force is composed of members of the IOSCO Board and will be chaired by Martin Wheatley, Managing Director of the UK Financial Services Authority, and CFCT Chair Gary Gensler. The Task Force will take into account other relevant initiatives by policymakers and stakeholders on benchmarks and serve as the IOSCO representative in any other international work initiatives on benchmarking, with a view to avoiding overlap or inconsistencies. As the global standard setter in the securities area, IOSCO is committed to taking necessary steps to prevent the manipulation of benchmarks and restore confidence in the use of those benchmarks in global financial markets.
The mandate for the Task Force is to identify benchmark-related issues across securities and derivatives, and other financial sectors and define the types of benchmarks that are relevant to financial markets. The Task Force will also identify the relevant policy issues including, appropriate regulatory oversight of the process of benchmarking, robust processes and procedures for benchmark calculation, and credible governance structures to address conflict of interests in the benchmark setting process and ensure transparency and openness in the benchmarking process. Ultimattely, the Task Force will develop global policy guidance and principles, including those related to effective self-regulation. In developing policy guidance and principles for financial market benchmarks, the Task Force will consider issues related to enforcement, information sharing and sanctions regimes in coordination with IOSCO’s expert committees.