“In February 2014, reflecting a number of concerns raised about the integrity of foreign exchange (FX) benchmarks, the Financial Stability Board decided to incorporate an assessment of FX benchmarks into its ongoing programme of financial benchmark analysis. The Foreign Exchange Benchmarks Group was established to undertake a review of FX benchmarks and analyse market practices in relation to their use and the functioning of the FX market as relevant. In particular, the group was mandated to undertake analysis of the FX market structure and incentives that may promote particular types of trading activity around the benchmark fixings. The Group was also tasked to propose possible remedies to address these incentives as well as to examine the construction of the benchmarks themselves. Final conclusions and recommendations of the Group will be transmitted by the FSB to the Brisbane G20 Leaders Summit in November. The FXBG has progressed its work in recent months in part by engagement with a wide range of FX market participants across the globe, as well as through independent analysis. To assist in the preparation of the final recommendations and conclusions by the FSB, the FXBG has today published an interim report for consultation so that all market participants have the opportunity to submit their views and comment on the proposed course of action. The group is proposing possible recommendations for reform in the foreign exchange market in the following broad categories:

• The calculation methodology of the WM/Reuters (WMR) benchmark rates;
• The publication of reference rates by central banks;
• Market infrastructure in relation to the execution of fix trades;
• The behaviour of market participants around the time of the major FX benchmarks (primarily the WMR 4pm London fix);
• Recommendations from a forthcoming IOSCO review of the WMR fixes.”