BY NKIRUKA NNOROM

The International Organization of Securities Commissions (IOSCO) has commenced public consultations with a view to developing appropriate policies that will aid in curbing financial benchmark manipulation by member stock exchanges.

The move, according to a statement from the organisation, was in an effort to strengthen the credibility and integrity of benchmarks used across financial markets.

The consultation report discusses concerns regarding the potential inaccuracy or manipulation of benchmarks and identifies benchmark-related policy issues across securities and derivatives and other financial sectors including the appropriate level of regulatory oversight of the process of Benchmark standards that should apply to methodologies for benchmark calculation; credible governance structures to address conflict of interests in the benchmark setting process within the reporting financial institutions as well as in the oversight bodies, as well as the appropriate level of transparency and openness in the benchmarking process.

“The Consultation also considers issues that market participants might confront when seeking to make transition to a new or different Benchmark,” the statement said, adding “There should be sufficient data used to construct a credible benchmark. In cases where there is insufficient data, regulatory authorities should consider the possibility of transitioning away from a benchmark.”