Reuters reports the Financial Conduct Authority's head of markets infrastructure and policy testified before a Parliment committee on their benchmark investigations. None of his comments indicated that the investigations were moving very quickly.
On the possibility of collusion in setting the London gold fix the FCA stated "It is possible but I have no clear evidence that that has actually happened". The FCA fined Barclay's in May for a trader manipulating the rate in 2012 to avoid paying off on a client gold contract. Next month the industry is to report on whether the process meets new benchmark guidelines.
The FCA could provide the committee with no guidance as to when the FX benchmark investigation, which began a year ago, will reach a conclusion.
A committee member claimed that it is well known by equity traders around the world that closing stock prices are also manipulated. The comment from the FCA involved checking back to see if any action has been taken in this area. While we are not familiar with charges of equity price manipulation either, the incentive to do so is clear, as portfolios are valued using those levels.
All in all, the FCA gives the appearance of moving deliberately, and since these are complex charges, with huge amounts of data and conversations to review, the slow pace appears inevitable. More important than the timing, at the conclusion of these benchmark investigations, market participants' faith in the markets must be restored.
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