FEMR Consultation: How Fair and Effective are the FICC Markets?

In its important consultation document published on 27 October 2014, How fair and effective are the fixed income, foreign exchange and commodities markets?, the Fair and Effective Markets Review (FEMR), has asked no less than 49 questions to restore trust in the wholesale markets which, as exposed by recent events, have been susceptible to abuse and cheating: see earlier post here. Headed by Nemat (Minouche) Shafik, the Bank of England’s Deputy Governor for Markets and Banking, Martin Wheatley (Chief Executive Officer, Financial Conduct Authority) and Charles Roxburgh (Director General, Financial Services, HM Treasury) as co-chairs, the FEMR, which was created by the Chancellor in June 2014 – see terms of reference – is expected to present its final recommendations in June 2015.

The FEMR intends to conduct an exhaustive and dynamic evaluation of the manner in which wholesale financial markets operate and over and above helping to restore trust in the Fixed Income, Currency and Commodities (FICC) markets the FEMR also aims to influence the international debate on trading practices. Earlier in the year (August 2014), the FEMR recommended and consulted on bringing another seven major UK-based FICC benchmarks into the regulatory perimeter originally rolled-out to regulate LIBOR.