Governance in the benchmarks sector – review

Suggested considerations

• Firms should consider conducting a documented effectiveness review of governance arrangements, covering board composition and capability, challenge and decisions, delegation and escalation, management information, conflicts and assurance.
• Boards and management bodies may wish to map collective capability against the administrator's current and emerging risks, including technology, cyber resilience, data management, innovation, methodology, market structure and user needs.
• Compliance teams may wish to test whether board and committee records capture principal challenge, decision rationale, actions, ownership and follow-through, including significant decisions taken between scheduled meetings.
• Firms should consider documenting ownership of key risks, decision rights, escalation routes and the way UK-regulated entity obligations are represented in group governance arrangements.
• Administrators may wish to review whether group reporting and escalation channels remain effective if individuals with multiple roles are unavailable, conflicted or subject to competing priorities.
• Firms should consider whether conflicts frameworks address multiple roles, group relationships, commercial pressures, competing priorities and differing stakeholder interests, and whether identified conflicts, mitigations and decisions are recorded.
• Board reporting owners may wish to distinguish information provided for awareness from matters requiring discussion, decision or escalation, and highlight changes, exceptions, emerging trends, risk movements, mitigation effectiveness and overdue actions.
• Administrators should consider whether between-meeting escalation arrangements provide directors with timely information on significant developments without disconnecting those decisions from formal governance records.

What changed

The FCA has not amended rules, introduced new thresholds or imposed a compliance deadline. Instead, it has set out supervisory observations that benchmark administrators should assess against their own activities, risks, users and operating environments. The FCA will use these observations in supervisory engagement alongside developments in the benchmarks framework. Independent market commentary reads the publication as part of heightened supervisory scrutiny of benchmark administrators, with particular emphasis on conflicts of interest, local accountability within groups, data and calculation controls, operational resilience and the governance foundations of benchmark integrity. The review also sits against the UK Government's proposed reform of the UK Benchmarks Regulation toward a more

Who is affected

• UK-authorised benchmark administrators
• UK-registered benchmark administrators
• Third-country benchmark administrators recognised, endorsed or otherwise subject to the UK benchmarks framework
• Boards, management bodies, senior managers, governance committees and control functions supporting benchmark administration activities
• Wider group entities and functions whose decisions, resources, technology or governance forums affect a UK-regulated benchmark administrator

Related regulations

• UK Benchmarks Regulation (retained Regulation (EU) 2016/1011 as incorporated into UK law)
• FCA Principles for Businesses, including Principle 2 and Principle 3
• Senior Managers Regime
• IOSCO Principles for Financial Benchmarks