Regulation regulation regulation: The new gold standard?
The Chancellor of the Exchequer’s annual Mansion House speech later today is expected to announce unprecedented regulation of the £3 trillion-a-day foreign exchange market following allegations of manipulation. George Osborne plans to opt out of the European Directive on market abuse, due to come into force in 2016, and instead will announce the extension of criminal legislation to cover the forex market, as well as the commodities and fixed income markets. We expect that this will mean secondary legislation further amending the Financial Services and Markets Act 2000, echoing the earlier changes which created an offence of manipulating LIBOR. Mr Osborne is also expected to announce a joint review of these markets by the Treasury, Bank of England and Financial Conduct Authority.
It remains to be seen how the FCA will pursue alleged wrongdoers in the current climate, where those accused are often unable to fund their own defence owing to restraint orders but cannot secure legally aided representation as a result of the ongoing VHCC row.