On June 10, 2015, the Fair and Effective Markets Review (FEMR), established by the Chancellor in June 2014 to conduct a review of fixed income, currency and commodity markets, published its final report. The report contains 21 policy recommendations aimed at preventing a repeat of the recent years’ misconduct in fixed income, currencies and commodities markets. The recommendations largely rely on market-led initiatives, or suggest legislative reforms to formalize regulators’ existing practices and extend incoming reforms to previously under-regulated markets.

The recommendations include the creation of a Market Standards Board to improve dialogue between regulators and the industry,  the extension of the senior managers’ regime to non-banks and (as the key element of the review) regulation of spot foreign exchange (FX). In the UK, spot FX has previously been treated as falling outside the scope of financial regulation and securities laws since it involves trading cash for cash but the recent probe into FX benchmark rigging in the UK and US identified spot FX as the market where most wrongdoing occurred.