Price fixing to become criminal offence

MacAg · Sep 25, 2014

http://www.theguardian.com/business...-gold-oil-financial-products-criminal-offence

Price-fixing on gold, oil and financial products to become criminal offence

Government publishes consultation on extending rules after the Libor-rigging scandal, to be introduced by the end of 2014

Fixing the price of gold, oil, and other financial products will become a criminal offence by the end of the year, the government announced on Thursday as it published a consultation on extending rules already introduced for Libor rigging.

Seven financial instruments are included in the consultation following recommendations by a review body being chaired by Bank of England deputy governor Minouche Shafik.

In his Mansion House speech in June, the chancellor, George Osborne, said he wanted to extend the regime introduced for Libor rigging to other benchmarks which were not directly regulated. After the Libor scandal erupted in 2012, the government made fixing the interest rate benchmark an offence that could lead to a seven-year jail term.

Of the seven benchmarks now being consulted on, three are linked to interest swaps - the so-called ISDA fix, and two rates known as Sonia and Ronia while the others are gold, silver, the Brent oil futures contact and the currency benchmark known as WM which prices foreign exchange rates at 4pm London time. The currency markets are currently subject to a wide-ranging investigation by regulators, and a number of banks have warned they face fines, including Royal Bank of Scotland, which has said it could have a "material impact" on its profits.

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."

The seven benchmarks were picked by the "fair and effective markets review" headed by Shafik which will publish its final report in June 2015. The consultation will run until 23 October during which time the government will hold "targeted industry roundtables with affected parties".
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Comper100 · Sep 25, 2014

Doubt it will do a thing, they did it with Silver a month ago......

MacAg · Sep 25, 2014

Was that in the UK? Or both the US and UK? I missed that story.

Yeah, I think you're right. I sometimes think that these new rules/laws are made to placate the naysayers, but the status quo continues.

SpacePete · Sep 25, 2014

People are going to be pissed if the gold price drop again after fixing is made illegal.

Remember not so long ago when many were claiming silver was about to rise dramatically after removal of the London fix? The price went in the opposite direction.

TeaPot&ChopSticks · Sep 26, 2014

What about price fixing fiat money using central banking practices ?

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