On June 10, 2015, the final report of the UK Fair and Effective Markets Review was published. The report includes an analysis of the causes of recent misconduct in the Fixed Income, Currency and Commodities markets, an evaluation of the impact of related reforms that have been implemented or are otherwise in progress and recommendations to enhance the fairness of the FICC markets. The recommendations will need to be implemented by public authorities and market participants domestically although several will require international discussions and coordination to implement. The recommendations to be implemented domestically include: (i) extending the UK criminal sanctions regime for market abuse by including a wider range of FICC markets, lengthening the maximum sentence from seven to ten year’s imprisonment and creating a regime for spot FX (the latter would be a civil and criminal regime for market abuse); (ii) extending certain elements of the Senior Managers and Certification regimes to a wider range of regulated firms that participate in the FICC markets; (iii) establishing a new FICC Market Standards Board; (iv) improving awareness of the application of competition law to the FICC markets; (v) developing new training and qualification standards; (vi) and requiring regulatory references for individuals. Recommendations requiring international coordination include: (i) developing globally agreed common standards for trading practices in FICC markets; (ii) agreeing a single global FX code; (iii) considering how to ensure benchmark administrators publish consistent self-assessments; and (iv) examining means to improve the alignment of remuneration and conduct risk. A report on implementation progress will be published by June 2016.

The final report is available at: http://www.bankofengland.co.uk/markets/Documents/femrjun15.pdf