FCA Backs Overhaul of UK Benchmarks Rules as Government Consults on New Regime

Key Takeaways

• Shift to Targeted Oversight: The UK plans to replace the current Benchmarks Regulation with the Specified Authorised Benchmarks Regime, focusing regulation on benchmarks critical to market integrity.
• Reduced Regulatory Burden: SABR aims to ease unnecessary compliance requirements while maintaining high standards for key benchmarks.
• UK-Tailored Framework: The reforms reflect the evolution of financial markets since 2018 and move further away from EU-derived rules.

Deep Dive

The Financial Conduct Authority has welcomed the UK government’s move to reform the country’s benchmarks framework, signaling support for a shift away from the EU-era Benchmarks Regulation toward a more targeted, UK-specific regime.

In a statement published recently, the FCA said the consultation on a new benchmarks regime presents an opportunity to modernize oversight in line with today’s financial markets, while easing unnecessary regulatory burdens without lowering standards. The regulator confirmed it is working closely with the government to reshape the framework so it remains proportionate, effective, and tailored to the UK’s markets.

The proposed changes would replace the current Benchmarks Regulation with a new Specified Authorized Benchmarks Regime, known as SABR. Under the new approach, regulatory oversight would focus only on benchmarks or benchmark administrators designated as critical to the integrity of UK financial markets, rather than applying broad requirements across the entire market.

Benchmarks underpin large parts of the UK’s financial system, from commodity trading and foreign exchange to bond issuance and derivatives clearing. The existing framework, introduced in 2018 under EU law, was designed to address misconduct and integrity risks following high-profile benchmark scandals. While it has helped strengthen market confidence, the government now argues that the regime no longer reflects how markets operate today.

According to the consultation, SABR is intended to create a more agile and proportionate system, ensuring continued access to a wide range of benchmarks while concentrating regulatory oversight where it matters most. The government says this approach should support both market integrity and the competitiveness of UK financial services.

The FCA said it will consult separately on the detailed regulatory requirements once the new framework is further developed. It also committed to engaging widely with benchmark administrators, users, and other regulatory bodies as the regime takes shape.

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