GFMA, comprising four international industry associations, has written to the European Commission and Parliament, the Financial Stability Board, the Bank of England, the Wheatley Review and IOSCO calling for international standards for benchmarks. It has developed a set of principles, under the headings of:
- Governance: a sponsor must (a) take overall responsibility for the quality and integrity of a benchmark, (b) clearly define the roles and responsibilities of participants in the benchmark process and (c) operate with transparency in relation to development and changes in benchmarks, assessing the impact on market participants;
- Benchmark methodology and quality: a sponsor should (a) ensure there is a methodology for conducting the benchmark price assessment that relies on sound data and accurately reflects market conditions and (b) follow best practice design elements; and
- Controls: a sponsor should (a) ensure there is an appropriate control framework for conducting and maintaining the benchmark process and for distributing the benchmark price assessment, (b) keep appropriate records of inputs received and methodologies used, (c) ensure appropriate controls exist over data collection and (d) set a Code of Conduct for contributors.
It has copied its submission to national regulators in many jurisdictions. (Source: GFMA Calls for International Benchmark Standards)