Fair and Effective Markets Review (FEMR)—one minute guide
Fair and Effective Markets Review (FEMR)—one minute guide

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Fair and Effective Markets Review (FEMR)—one minute guide
  • Deficiencies in the FICC markets
  • Key recommendations of FEMR
  • Practical impact of FEMR
  • July 2016 implementation report
  • May 2018 progress report

On 10 June 2015, the Fair and Effective Markets Review (FEMR) published its final report. Running to 106 pages, the report covers a wide range of topics and issues relating to fixed income, commodities and currencies markets (FICC) and sets out 21 recommendations for improvements. The FEMR report is likely to be the first step on a long road of changes to for the way in which the FICC markets operate and the regulations to which they are subject.

Deficiencies in the FICC markets

The need for the FEMR arose from a concern that public trust in the wholesale markets had been diminished following a series of high-profile enforcement actions involving FICC markets. In June 2014, the review was launched. The Bank of England (BoE), the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) worked together to consider whether there had been deficiencies in terms of fairness and efficiency of the FICC markets and what should be done to address any remaining deficiencies. FEMR focused on a variety of areas including: market structures, standards of acceptable market practice, systems of internal governance and control, reinforcement of standards through market discipline, individual accountability and remuneration and incentive schemes.

Key recommendations of FEMR

FEMR set out some important recommendations for FICC markets including:

  1. creating a new statutory civil