IOSCO publishes principles for financial benchmarks

17 July 2013

IOSCO published the final report on Principles for Financial Benchmarks, which provides an overarching framework of principles for benchmarks used in financial markets.

The principles form an integral part of IOSCO's work in leading efforts to enhance the integrity, the reliability and the oversight of benchmarks by establishing guidelines for benchmark administrators and other relevant bodies in the following areas:

• Governance: to protect the integrity of the Benchmark determination process and to address conflicts of interest;
• Benchmark quality: to promote the quality and integrity of Benchmark determinations through the application of design factors;
• Quality of the methodology: to promote the quality and integrity of Methodologies by setting out minimum information that should be addressed within a Methodology. These principles also call for credible transition policies in case a Benchmark may cease to exist due to market structure change;
• Accountability mechanisms: to establish complaints processes, documentation requirements and audit reviews.

The principles provide a framework of standards that might be met in different ways, depending on the specificities of each benchmark. In addition to a set of high level principles, the framework offers a subset of more detailed principles for benchmarks having specific risks arising from their reliance on submissions and/or their ownership structure.

The principles provide for benchmark administrators to publicly disclose their compliance with the principles within twelve months of the publication of the report, with the intention of IOSCO reviewing within an 18 month period the extent to which the principles have been implemented.

Full press release

Full report

© IOSCO