Monday, October 01, 2012

Wheatley and Gensler Will Co-Chair IOSCO Task Force to Examine Financial Benchmarks

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.