On July 30, HM Treasury announced the terms of the review which will be conducted by Martin Wheatley, the CEO-designate of the Financial Conduct Authority, examining the framework for the setting of LIBOR.
The Wheatley review will formulate policy recommendations with a view to reforming the current framework for setting and governing LIBOR, including consideration of:
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Whether participation in the setting of LIBOR should become a regulated activity under UK financial services legislation and regulations;
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How LIBOR is constructed, including the feasibility of using actual trade data to set the benchmark;
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The appropriate governance structure for LIBOR;
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The potential for alternative rate-setting processes;
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The financial stability consequences of a move to a new regime and how a transition could be appropriately managed;
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Determining the adequacy and scope of sanctions to appropriately tackle LIBOR abuse;
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The scope of UK regulatory and criminal authorities’ powers with respect to financial misconduct, particularly market abuse and abuse relating to the setting of LIBOR and equivalent rate-setting processes; and
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The FSA’s approved persons regime and investigations into market misconduct.
A formal discussion paper covering the above points will be published on August 10 and the review will aim to publish its conclusions by the end of September.
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