In May 2015 the Financial Stability Board (FSB) agreed a work plan on measures to reduce misconduct risk. The work plan involves:
- examining whether reforms to incentives, for instance to governance and compensation structures, are having sufficient effect on reducing misconduct;
- examining whether steps are needed to improve global standards of conduct in the fixed income, commodities and currency markets; and
- coordinating reforms to major financial benchmarks.
The FSB believes that collectively, these efforts will strengthen the resilience of the financial system by raising expectations for, as well as awareness of, good practice standards of behaviour and conduct across markets and market participants.
The FSB has now published its second report on progress in its work plan on measures to reduce misconduct risk. The report describes the progress made since the previous report in November 2015. The report also notes future developments including:
- by the end-2017 the FSB will develop and consult on: (i) supplementary misconduct-related guidance for existing compensation standards; and (ii) recommendations for consistent national reporting and collection of data on the use of compensation tools to address misconduct;
- the International Organization for Securities Commissions will publish a final report from its market conduct task force in January 2017 which will include a detailed regulatory toolkit for wholesale market conduct regulation; and
- by end-2017 the FSB will issue a final progress report in implementing the recommendations set out in its July 2014 report, Reforming Major Interest Rate Benchmarks.
View FSB publishes second progress report on measures to reduce misconduct risk, 1 September 2016