March 10, 2014 - Thomson Reuters today announced that it has established a new subsidiary to prepare for the regulation of financial benchmarks. Thomson Reuters Benchmark Services Limited (TRBSL), a subsidiary of Thomson Reuters Corporation, facilitates compliance with the IOSCO (International Organization of Securities Commissions) principles for benchmark administrators ahead of the 1 July 2014 deadline.
Having already received FCA-authorisation for Thomson Reuters ongoing role as calculator of LIBOR (London Inter Bank Offered Rate), TRBSL intends to assume the governance and control of other financial benchmarks in Thomson Reuters 160-strong global benchmark portfolio.
Over the past year, Thomson Reuters has been chosen to publish 11* new benchmarks as either the sole administrator or on behalf of partner administrators, leveraging the Company's automation technologies, access to trade data streams and the expertise of Thomson Reuters specialist benchmark teams. Thomson Reuters administers, calculates and distributes OTC financial benchmarks on behalf of a number of market associations and 52 central banks, including HIBOR, SIBOR and ISDAFIX, as well as producing Thomson Reuters indices covering equities, bonds, and commodities.
TRBSL is now authorised and regulated by the UK's Financial Conduct Authority (FCA) for Thomson Reuters ongoing role as calculator of LIBOR, the world's first and only regulated benchmark, on behalf of ICE Benchmark Administration Limited. Thomson Reuters is also the benchmark administrator for a number of key material benchmarks across the globe with many of these benchmarks expected to become regulated by local regulators in much the same way as LIBOR is today. The new subsidiary enables Thomson Reuters to enhance and evolve its benchmark governance and compliance activities across jurisdictions and work with global regulators to obtain accreditation for other benchmarks that are chosen for regulation.
"Thomson Reuters supports the financial industry in multiple ways to improve transparency in both liquid and illiquid markets," said John Cooley, global head of indices and reference rates, Thomson Reuters. "Over the past 18 months, we have been working closely with global regulators, authorities and agencies to ensure that as an industry we collectively enhance and re-establish trust in key benchmarks and continue to support the vital role they play in financial markets. Our global benchmark portfolio means that we can do this at scale, applying learnings and best practice across multiple benchmarks and jurisdictions."
IOSCO developed and published its Principles for Financial Benchmarks in July 2013 in response to investigations by global regulators. The proposed guidelines provide a framework for benchmark administrators to ensure the quality, integrity, continuity and reliability of benchmarks. For Thomson Reuters, the establishment of TRBSL is a further step in ensuring robust governance and oversight that is aligned to IOSCO principles and other emerging regulatory reform impacting benchmark policy and protocols.
* The 11 new benchmarks/fixings launched in 2013 were: ACI (Poland) FRA; ACI (Poland) IRS; ACI (Poland) OIS; JSCC JPY Swap Settlement AM fixing; JSCC JPY Swap Settlement PM fixing; TMA CNH HIBOR; THB SPOT FX; SGD SPOT FX; IDR 1M NDF; IDR SPOT; ABS SGD SOR; THB REF.
