In Consultation Paper 12/36 (CP), we outlined our proposals for the regulation and supervision of benchmark activities. The Wheatley Review of LIBOR recommended to the Government that the administering of, and submission to, LIBOR should become regulated activities under the Financial Services and Markets Act 2000 (FSMA). Subsequently, the Treasury amended the Regulated Activities Order to make the administering of, and providing information to, specified benchmarks regulated activities. This Policy Statement (PS) outlines our framework for the regulation and supervision of benchmark activities, following consultation. In particular, it summarizes the responses we received to our CP and outlines our view of those responses. It also presents the Handbook text that applies to benchmark administrators and submitters to benchmarks.

In July 2012, the Government asked Martin Wheatley to conduct an independent review of the LIBOR-setting framework. The Review outlined a number of issues and failings in the LIBOR process and made recommendations to both Government and market participants to rectify those failings. The final report was published in September 2012.1 In particular, the Wheatley Review of LIBOR outlined deficiencies in firms’ systems and control procedures, weaknesses and conflicts of interest in governance frameworks, as well as a lack of credible external oversight by the administrator of LIBOR. As a consequence, the Review recommended to the Government that LIBOR activities should be brought within the scope of statutory regulation.