Rigging the gold and silver fixings, foreign exchange and oil benchmarks will become criminal offences, the Government said today.
Traders found guilty of manipulating seven key benchmarks could face jail sentences and huge fines, in line with the legislation rushed in to cover the Libor scandal.
Economic Secretary to the Treasury Andrea Leadsom said: “The integrity of the City matters to the economy of Britain.
Ensuring that the key rates that underpin financial markets are robust, and that anyone who seeks to manipulate them is subject to the full force of the law is vital.
“That’s why the Government is determined to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them.”
Leadsom launched a one-month consultation today.
In his Mansion House speech in June Chancellor George Osborne announced his plans to extend the criminalisation of financial benchmark rigging from Libor to other areas.
That followed the Libor rigging scandal which has seen ten firms fined £4 billion by global regulators for manipulating the key interest rate benchmark.
Today’s measures would extend the rules to cover two more interest-rate benchmarks used in the swaps markets, the foreign exchange 4pm London fix, the ISDAFix used for interest rate swaps, ICE gold and silver fixes, and the Brent oil futures contract. Between them they account for billions of pounds of derivatives trades daily.
The Government’s move came as it emerged that the Serious Fraud Office has stepped up its investigation into Barclays’ £5.8 billion cash injection from Qatar at the height of the financial crisis.
The police have served Section 2 notices demanding evidence from four former Barclays directors who were on the board at the time of the 2008 fund raising. These are reported to be directors who have not yet been interviewed by the SFO.
