FCA sets out its stall on benchmarking

FCA sets out its stall on benchmarking
What lessons can financial services firms take from the latest enforcement action relating to benchmarking? Victoria Turner, a solicitor specialising in financial regulation with Pannone, part of Slater and Gordon, believes the latest development hammers home the need for robust systems and controls to combat manipulation.

Original news

Press Release: Lloyds Banking Group fined £105m for serious LIBOR and other benchmark failings

Lloyds Bank and the Bank of Scotland have been fined £105m for serious misconduct relating to the Special Liquidity Scheme (SLS), the Repo Rate benchmark and the London Interbank Offered Rate (LIBOR). The banks, both part of the Lloyds Banking Group, were found to have attempted to manipulate the Repo Rate benchmark to reduce the fees payable to the Bank of England for their participation in the SLS, a scheme designed to support UK banks during the financial crisis. The Financial Conduct Authority (FCA) said while the LIBOR-related misconduct is similar to that of other banks, the attempted Repo Rate manipulation is ‘misconduct of a type that has not been seen in previous LIBOR cases’.

What is the background to the enforcement action in the UK and the US?

Since 2009, the FCA, its predecessor the Financial Services Authority (FSA) and other international regulators have been extensively investigating allegations of widespread attempts in the banking sector to manipulate benchmarks—specifically LIBOR.

The FCA (and the FSA), has now taken action against seven regulated firms and issued fines totalling over £500m in connection with misconduct relating to LIBOR. This includes the £105m fine issued to Lloyds Banking Group.

In relation to the enforcement action taken against Lloyds, the FCA’s Final Notice identifies two benchmarks which Lloyds is said to have manipulated.


A benchmark reference rate that is fundamental to the operation of both UK and international financial markets. At the relevant time relating to this particular fine, LIBOR was published in ten different currencies for 15 different maturities.

Repo Rate

A benchmark rate (now

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