Thomson Reuters has established a new subsidiary to handle its involvement in calculating financial benchmarks, which are set to operate under tougher regulations in the wake of widescale abuses by bank data suppliers.
Thomson Reuters Benchmark Services Limited (TRBSL) has achieved authorisation by the Financial Conduct Authority (FCA) for the firm's ongoing role as a calculator of Libor, the benchmark at the centre of a scandal over rate rigging by participating banks.
Libor is the first benchmark to fall under the aegis of new regulations, with many more expected to follow. TRBSL intends to assume the governance and control of other financial benchmarks in the firm's 160-strong global benchmark portfolio, operating in accordance with new integrity guidelines laid down by Iosco last year and set to come into force in July 2014.
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. The financial information giant administers, calculates and distributes OTC financial benchmarks on behalf of a number of market associations and 52 central banks, including Hibo, Sibor and Isdafix, as well as producing Thomson Reuters indices covering equities, bonds, and commodities.
John Cooley, global head of indices and reference rates, Thomson Reuters, says: "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."