FEMR progress report commends the efforts of firms to drive higher market standards

By Rob Moulton and Katy Sanders

HM Treasury (HMT), Bank of England (BoE), and the Financial Conduct Authority (FCA) have issued a progress report in relation to the Fair and Effective Markets Review (FEMR). The progress report follows almost three years after the final FEMR report and recommendations were published, in an attempt to restore trust in the Fixed Income, Currency, and Commodities (FICC) markets after the attempted manipulation of LIBOR.

Whilst the progress report does not identify any new initiatives, it nonetheless provides a good summary of the work firms and authorities have undertaken and development to date across the following four areas:

  • Strengthening individual accountability
  • Improving market standards
  • Embedding a forward-looking approach to FICC markets
  • Strengthening benchmarks

Notable is the reference to the FCA’s approach to supervision, in particular the focus on market abuse detection in fixed-income markets. This is in light of a number of other market-based reviews that the FCA has undertaken, including the review of market abuse controls in asset managers.

The progress report clearly indicates that there has been substantial focus from both firms and authorities on implementing the FEMR recommendations. However, as the progress report observes, whilst firms and authorities have achieved a great deal, they cannot rest on their laurels.