Treasury is consulting on secondary legislation to bring within the scope of UK financial regulation the various activities and offences related to LIBOR and benchmark manipulation already inserted in the FS Bill. Treasury says it wants certainty on the provisions, which is why it is consulting separately on secondary legislation in advance of the FS Bill receiving Royal Assent. The proposals:
- insert, into the Financial Services and Markets Act 2000 (Regulated Activities) Order (RAO), the new regulated activities of (i) providing information in relation to or (ii) administering a “regulated benchmark” (which is to be specified in a schedule to the RAO and, for current purposes, is only LIBOR);
- set out a framework to grant permission for the new activities for those already carrying them on and to create an interim regime for those who apply for permission but whose application has not been determined by the date on which the activities become regulated;
- include benchmark-related activities among those FCA must consider for the purposes of its consumer protection objective; and
- specify LIBOR as a “relevant benchmark” for the purposes of the misleading statements criminal offence under what will be the new FS Act.
Treasury notes the FS Bill gives FCA greater powers in rule-making, including rules to require firms to contribute to benchmarks. It also notes the flexibility of the FS Bill to extend to benchmarks other than LIBOR. It asks for comment by 24 December 2012. (Source: Treasury Consults on LIBOR Amendments)